New Home Sales rose again in December, marking the third consecutive monthly gain and the third best annual gain since 2008. For all of 2015, New Home Sales rose 14.5 percent thanks to a strengthening labor market, increased confidence in potential homebuyers and low home loan rates.
According to the latest S&P/Case-Shiller Home Price Index, home prices also rose 5.8 percent in November over the prior year. On a monthly basis, prices were up 0.9 percent from October, the fastest monthly gain since March. On a similar note, research firm CoreLogic also reported that home prices rose 6.3 percent from December 2014 to December 2015. CoreLogic cited strong demand and tight supply for the gains.
The economy overall did not perform as well, however. At its first Federal Open Market Committee meeting of 2016, the Fed cited a slowing economy, both in the U.S. and globally, as the reason to leave the benchmark Fed Funds Rate unchanged, as expected. This is the short-term rate at which banks lend to one another overnight. The disappointing fourth quarter Gross Domestic Product (GDP) report was one key reading showing slowing growth here at home.
Because of the economic uncertainty at the start of this year, home loan rates have remained near historic lows, which is great news for homebuyers and homeowners considering a refinance. Only time will tell what’s ahead, so stay tuned!
If you have any questions about housing or rates, please call or email today.