Prescott Real Estate News Blog's purpose is to keep current, past, and potential clients apprised of the real estate market conditions for the Prescott, Arizona Area. National and state news and events will be posted but special emphasis will be placed on Prescott Area and the Yavapai County - Prescott, Prescott Valley, Chino Valley, Dewey and Kirkland/Skull Valley.
-Prescott Real Estate News
Last week there were more signs that the housing sector continues to improve with housing starts rising and home prices seeming to increase. Is it all good news for the housing market? Read on for details.
Housing Starts surged by 12.1% in December to 954,000 units on an annualized basis. This was above expectations and the highest level since June 2008.
January 22, 2013
Building Permits, a sign of future construction, also increased, coming in slightly higher than the November reading.
In addition, research firm CoreLogic reported that home prices rose by 7.4% in the year ended in November. This figure, which includes the sales of distressed properties, was the largest year-over-year increase since 2006 and it has been positive for nine straight months. Also, the Obama Administration's December Housing Report showed that home prices had solid annual gains for the year ended in October, with the Federal Housing Finance Agency (FHFA) and Case-Shiller housing price indices up 5.6% percent and 4.3%, respectively, from one year ago.
It's also important to note that RealtyTrac's year-end 2012 foreclosure report showed that foreclosure activity increased in 25 states. However, median home prices also increased in 25 states, which pulled 1.6 million homeowners out of negative equity in 2012.
Housing Prices May See Continued Gains
Goldman Sachs has reported that the fundamentals are pointing towards larger gains for housing prices in the next couple of years. And with home loan rates remaining near record lows, great opportunities are available.
As always, one thing that's important to monitor is inflation. Since inflation reduces the value of fixed investments, inflation is considered the arch enemy of Bonds and, therefore, of home loan rates, which are tied to Mortgage Bonds. However, last week's wholesale-measuring Producer Price Index and the Consumer Price Index showed that inflation remains tame, meaning inflation is not a factor at this time.
The bottom line is that now remains a great time to consider a home purchase or refinance, as home loan rates remain near historic lows. Let me know if I can answer any questions at all for you or your clients.
The markets were closed on Monday in observance of Martin Luther King, Jr. Day and the economic calendar is pretty quiet the rest of the week.
• More housing news is ahead, with Existing Home Sales on Tuesday and New Home Sales on Friday. • The only other economic report will be Weekly Initial Jobless Claims on Thursday. Last week, claims fell to a five-year low and this may have been due to seasonal factors. Investors will be looking for any uptick in the numbers.
In addition, many companies will be reporting their earnings numbers and the markets will be closely watching the results. Positive earnings data could help push Stocks higher and shift investing dollars out of the Bond markets, which could have a negative impact on home loan rates.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.