Home Prices Still Rising

by October 7, 2009 • 2 comments

Mortgage rates remain at near eight month lows as strong demand in the bond market drove the yield on the ten year Treasury note below 3.20% before rising slightly to 3.25% today on a renewed rally in stocks. The rate on the benchmark thirty-year is hovering right at 5% with no points and the fifteen-year stands at 4.375. Thirty-year rates actually were pushing 6% back in the spring so this is quite an improvement and rather unexpected. The general consensus has been that as the economy pulls out of recession and as signs of economic growth become more evident, rates would rise as inflationary pressures mounted, but this has not materialized.

As lingering fears over the shape of the US and world economies has driven the price of gold to a record $1,039 an ounce today, the dollar is flat-lining and you are beginning to hear comments like “irrational exuberance” when describing the run up in stock prices this year. And there are other worrisome signs. Last week’s unemployment report came in well below expectations as the overall rate of unemployment rose to 9.8%. Consumer confidence also fell unexpectedly last month and retailers are now forecasting a dismal holiday shopping season ahead. Though I feel the overall economy is in a hugely better position than this time last year, I still say something has to give and I think that something is a big correction coming in stocks.

At least there is continued good news coming from the housing sector. Last Thursday the National Association of Realtors reported that homenuyers wrote more contracts to purchase homes than in any month this year. The August Pending Home Sale Index rose a whopping 6.4% and marked the seventh consecutive month of increases in the index. The August increase was well above economist’s forecasts who had expected a modest rise of 1%. In contrast, July pending home sales rose 3.2%. Perhaps even better news for the housing market came last Friday when the S&P Case-Shiller Home Price Index was released for July and showed that home prices in twenty cities across the US were up 1.6%. This was the third month in a row that the index has shown prices rising. The June index showed an increase of 1.4%. Even though July 2009 prices were still 13.3% below July 2008, the increase was still a pleasant surprise to analysts who site the data as evidence of a trend towards a stabilizing housing market.

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1 Shelly Bowden October 7, 2009 at 2:44 pm

Just found your website-terrific. Great resource for beach info. Thanks!


2 cavell scott November 1, 2009 at 4:09 pm

I am living in New York City, i have 2 lots in a place call Sunny Hill,can you tell me what is going on in that area is it, a good time to build or not. Do you see any hint of demand for land or house, due to the New air-port. What site can i go to, to see the type of house in that area. Thank for your infor.