Starting in January 2015, a new law takes effect that mandates all new homes 4,500-square-feet (whether all the square footage is finished or not) and larger are required to have residential fire sprinklers. All new homes will also be affected by other new energy code changes such as air exchangers and insulation changes. It is estimated that these changes could drive up prices of new homes by more than $10,000 when you factor in the sprinklers. If you are able to purchase a new home before these changes come, it will save you some money.

Minnesota homeowners and their families will benefit from this new law: residential fire sprinklers save lives and can minimize the damage caused by a house fire. In addition, most insurance companies offer a discount from 5 to 15% for homes with fire sprinklers.

Rising interest rates can be a good thing for several different reasons.

• Right now people have a false sense of a high mortgage rate. Just a few short years ago 6% was a good rate. We have been spoiled with historically low rates that could not last forever. Even though rates are rising, they are still low.
• If you are a seller, the rising rates and the rising home prices are getting buyers to finally start buying. Buyers realize that the time of the great deal is over and they need to buy now to still get a good deal.
• The loan back up will start ending. So many people were refinancing and that combined with new mortgages had the loan industry all backed up. The rising rates will keep most from refinancing allowing more time for new purchase mortgages.
• Rising rates are a sign that the economy is improving and is also a good sign then for the housing market.

RE/MAX has put out the National Housing Report for June 2013.  For 17 months in a row now, home sales and prices have been higher than for the same month the previous year! The Housing Report surveyed 52 different Metropolitan areas to get their data.  Click here for a full copy of the report!

Many people are wondering if all this positive news about the housing market and increase in home prices is setting up the market for another housing bubble. The answer is no.

This market increase is very different in several ways.

• Credit has tightened – prior to the housing bubble, loans were very easy to get and that is not the case today
• Homes for sale were abundant – now the market lacks homes for sales, builders are building, some sellers are selling, but no one can keep up with the demand we are facing right now
• Interest rates are low – the low interest rates are motivating buyers to buy now rather than wait as the interest rates are on the upswing
• Foreclosures are declining – the decline in foreclosures is helping the price of homes to increase

During the current phase of home price increases, the market is very different from the market prior to 2006 and the price increases are healthy market driven increases, rather than being falsely inflated.