According to the S&P/Case-Shiller Home Price Indices, home prices nationwide are at their highest since September 2010. Nationally, we continue to make gains despite dips in a few trouble spots. In fact, Seattle was the only city on the report that posted a decline in prices in August – and that decline was just one tenth of a percent. Phoenix was the real estate recovery standout, posting an impressive 18.8 percent increase in its annual rate of change over the previous year. August was Phoenix’s fourth consecutive month of double-digit positive annual returns. Even Las Vegas, a city that took a harder and longer real estate hit than most other cities nationwide, finally saw a positive annual rate of change, at nine tenths of a percent over the year before. This was Las Vegas’s first positive annual return since January 2007.
The number of pending home sales rose three tenths of a percent in September over the month before and 14.5 percent over the previous year. Although industry experts had hoped for more improvement, September marked the 17th consecutive month of annual improvements for pending home sales nationwide.
What’s driving the housing recovery?
Existing and new home sales are up. Inventory continues to go down. Homes priced between $250,000 and $500,000 are doing well. The number of homes listed for under $100,000 has fallen drastically.
The 30-year fixed-rate mortgage interest rate fell in early November to 3.39 percent and is expected to remain extremely low for the rest of the year, gradually rising to 4 percent sometime in the second half of 2013. The 15-year fixed rate today is 2.84 percent, down from 3.31 percent a year ago.
Mortgage applications declined in late October and early November, partly due to complications caused by Hurricane Sandy. This week, applications (new loans and refinances) are up once again, according to the Mortgage Bankers Association. Across the country, states continue to address any backlogged foreclosures. Mortgage delinquencies and default rates are low and continue to decline.
A buyer’s market
As many experts have mentioned this year, it’s a buyer’s market but the window is closing. Prices are still low, but rising. Some communities are seeing a shortage of homes for sale, and prices are going up as a result. Foreclosures are under control in most states. Interest rates remain deliberately at record lows, in large part as an effort to boost the economy and help Americans recover from the housing bust. The rates will not remain at this level forever, though, and will likely rise in under a year. Unemployment is down in many cities, and consumer confidence continues to improve across the board. If you’re in the market for a home, don’t wait.