With the recent increase in mortgage rates, a modest decline in sales volume is likely to occur in the next few months. Sales of existing homes rose 2%, to 5.6 million seasonally adjusted annual units in October – the fastest pace since February 2007. This was the second straight monthly gain and the sixth in the past eight months. All four Census regions recorded increased sales, with the West having the largest year-over-year increase. Inventory of existing homes declined 0.5% in October, to 2.02 million homes available for sale. Inventory is now 4.3% lower than a year ago. The pickup in the pace of residential construction this year is a good sign that overall supply of homes will steadily increase, providing more choices for buyers and encouraging homeowners who want to trade up but have been worried about finding a new place to put their property on the market.
The S&P CoreLogic Case-Shiller U.S. National Home Price Index rose 5.5% year-over-year in September, up from 5.1% in August. The index has now surpassed its previous peak of July 2006. Seattle, Portland, Ore., and Denver reported the highest year-over-year gains, while New York and Washington posted the weakest price appreciation. Low inventory of new and existing homes is pushing up prices across the country, particularly for would-be buyers looking for lower-priced homes.
ising mortgage rates are likely to slow down home price growth in the next few months. Mortgage rates have risen about half a percentage point since the election. The impact of rising rates is likely to be greater for home values in the higher end of the price range. Lower-priced homes are in short supply and high demand across most metro areas, so price growth is likely to stay strong even with the increase in borrowing costs.
Posted on December 10, 2016 at 11:17 am by Itzel Machado