Home Prices are Up, Rates are Down

Filed under: Market Comentary

Recent housing reports have indicated that across the county, housing prices are trending upward.

The S&P/Case-Shiller 20-City Home Price Index, which is an index measuring home prices in 20 major metropolitan markets in the United States, rose 5.7% in December.  While this may not be indicative of every housing market, it gives us a strong sense of the direction the country as a whole is moving.

inflation and deflation graphPredictably, with this increase in pricing, came a moderate slow down in new home sales during the month of January.  New home sales totaled 494,000 for the month of January, falling short of the expected 520,000.

At the same time, we saw mortgage rates continue their downward trend in January and February with conforming 30 year fixed rates dropping well below the 4.0% mark.

Eyes are now turned to the upcoming February employment report, set to be released March 4 by the Bureau of Labor Statistics.  A weak report could send mortgage rates lower still, or vice versa.

So what does all of this mean?

The housing market in general, is strengthening as prices continue to increase slightly, while rates continue to remain low.  This is great news for home owners who may be looking to refinance in order to lower their payments, eliminate mortgage insurance, or pull equity out of their home.

Home buyers, however, may want to take note that their buying power could decrease slightly if prices continue to rise and rates take a turn in an upward direction.

Overall, the market is favorable now for those looking to buy or refinance and it may be wise to consider your position at this point and determine if a purchase or refi makes sense for your situation.

If you have questions or would like to discuss financing options, feel free to give me a call at any time.

Franklin Loan Center | NMLS 237653
Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act, 4131316
For questions or concerns please email info@franklinlc.com