Three Reasons To Buy a Home in Market ShiftSome HighlightsThe housing market is moving away from the frenzy of the past year and it’s opening doors for you if you’re thinking about
What's Happened to Housing Market and Interest Rate?
Dated: February 1 2021
- House prices rose 1% from October to November according to the FHFA index. Year-over-year, home prices were up 11%.
- The S&P CoreLogic Case Shiller home price index showed a seasonally adjusted appreciation of 1.4% month-over-month in November. Year-over-year, the 20-city composite showed a 9.1% gain. The report once again did not have sufficient data from Detroit due to coronavirus concerns. Among the remaining 19 cities, Phoenix, Seattle, and San Diego had the highest year-over-year gains. In Phoenix, home prices appreciated 13.8%; in Seattle, home prices are up 12.7%, and in San Diego, home price rose 12.3%.
- In January, the consumer confidence index increased from 87.1 to a reading of 89.3.
- For the week ending 1/22, mortgage application submissions saw a composite decrease of 4.1% with the purchase index dropping by 4% and the refinance index dropping by 5%. Year-over-year, however, the purchase index rose 16% while the refinance index rose 83%.
- Last Wednesday, Federal Reserve Chairman Jerome Powell announced that interest rates would remain unchanged, reaffirming the central bank’s dedication to restoring the country’s economic health.
- For the week ending 1/23, initial jobless claims fell by 67,000 to reach a seasonally adjusted, three-week low of 847,000. For the week ending 1/16, continuing claims dropped as well, falling by 203,000 to reach a seasonally adjusted level of 4.77 million – the lowest level since the pandemic began.
During the fourth quarter of 2020, GDP increased at an annual rate of 4%.
- In December, new home sales, or the sales of newly constructed homes, rose at a seasonally adjusted rate of 842,000, up 1.6% from the previous month. Year-over-year, new home sales are up 15.2%. The number of new home sales in December brings the 2020 total to an estimated 811,000, up 18.8% from the 2019 total.
- Personal income increased slightly in December, up 0.6% from the previous month. Consumer spending, however, fell by 0.2%. Core inflation remained relatively unchanged with just a 0.3% increase. Additionally, the current savings rate is extremely high, at 13.7% -- twice as high as normal.
In December, pending home sales decreased by 0.3% to fall to a level of 125.5, according to the National Association of REALTORSâ (NAR). Year-over-year pending sales were up 21.4%, reaching the highest December level ever recorded!
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