In the rollercoaster that is housing news this week, home prices reach new lows in nine cities and are down to their lowest levels since March. housing starts are down and permits are up and builder confidence rates are stable.
Today, the US Commerce Department announced a jump in new home sales of 17.5%, the best month the new home sector has had since April (although sales are down 7% from this time last year). Some speculate the rise occurred due to buyers attempting to lock in rates given their rise (the average 30 year mortgage rate was 4.93% in December, up from 4.44% in November).
New home sales weren’t strong in all regions, however the West performed well (ironically in the same region where there is an inventory glut). Builders also finally caught a break after two straight years of getting pummelled in that the median price rose 8.5% from last year.
Some day we’ll be able to look back and point at the exact move that caused the proverbial house of cards to topple, but for now, we continue the long bounce at the bottom.
Dave Kinkade
January 27, 2011 at 7:54 am
If people continue to sit out the market before buying, they are crazy. With rates hovering this low for a brief moment in time, this real estate fire sale should have people buying. That many aren’t is troubling. Obviously the economy is a huge factor but people cannot afford to sit out any longer. When mortgage rates head up (and they certainly will) the price of the house will only be part of the consideration. The actual monthly cost of the mortgage is going to have a lot of people feeling that it is 1979 all over again.
Agent for Movoto
January 27, 2011 at 7:11 pm
You know, i’ve been seeing the # 17.5% a lot in the real estate blog world today, and it’s weird . . . . it’s the % by which new home sales are supposed to have increased, and it’s also cited as the % by which new foreclosures are supposed to have dropped (in CA, anyway). That’s according to the L.A. Times real estate page….. coincidence?
Lani Rosales
January 28, 2011 at 1:09 am
OOOH that IS an interesting coincidence….