Rising Home Prices

Here are some interesting headlines from Inman:

 House price in Finland

Rising home prices a ‘double-edged sword’ in California

“Improving home prices are a double-edged sword for the housing market. While welcomed news for homeowners and prospective sellers, diminished affordability is squeezing out many buyers and dampening their enthusiasm for home purchasing,” said 2014 CAR President Kevin Brown in a statement”.

Mortgage applications hit 12-year low as refi boom dries up According to research, Loan Applications for purchase loans are also down 12 percent from a year ago, so lending volume is way down.

“Applications for purchase loans during the week ending Dec. 13 were down a seasonally adjusted 6 percent from the week before and 12 percent from the same time a year ago, to the lowest level since December 2012. Requests to refinance were down 4 percent from the previous week, continuing their long downward trajectory”.

Surprise taper could jolt mortgage rates. Low interest rates have made homes affordable in recent years, but higher rates could come if the Fed tapers bond purchases

“Not only do mortgage rates tend to follow broad trends in 10-year Treasury yields, but the Fed’s “quantitative easing” includes $40 billion a month in MBS purchases. Take the Fed out of the demand side of the equation for MBS issued by Fannie Mae and Freddie Mac, and homebuyers can probably expect to pay higher rates on home loans”.

 

photo by: Yenching C
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