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June 6 (Bloomberg) — While it’s folly to predict exactly when local housing bubbles will burst, there are ways to ensure that your real-estate holdings don’t explode. <\/p>\nJune 6 (Bloomberg) — While it’s folly to predict exactly when local housing bubbles will burst, there are ways to ensure that your real-estate holdings don’t explode. <\/p>\n
With U.S. Federal Reserve Chairman Alan Greenspan finally weighing in with the observation on May 20 that he’s seeing “an unsustainable underlying pattern” and “froth” in U.S. housing markets, it makes sense to monitor local economic signs to guide when — and when not to — buy. <\/p>\n
There may be a gradual slowdown as mortgage rates ascend in line with the Fed’s policy to curb inflation by raising short- term borrowing costs, provided it stays that course. So paying attention to types of financing used in the most active markets is critical. <\/p>\n
It’s unlikely that the housing market will crash soon. Fixed mortgage rates continue to hover below 6 percent with adjustable rates about 2 percentage points lower. The 77 million-strong baby boomer generation is also in the throes of buying, upgrading and investing in second and third homes. <\/p>\n
Single-family, existing-home sales rose 4.5 percent in April, setting a record, according to the National Association of Realtors, the industry’s trade association. <\/p>\n
In the first quarter, U.S. home prices increased by an average of 12.5 percent compared with a year earlier and by 2.2 percent compared with the previous three months, according to the Office of Federal Housing Enterprise Oversight in Washington. <\/p>\n