Friday, December 28, 2012 / by Rummy Dhanoa
Housing Ends Year on High Note
The fiscal cliff talks were the primary influence on mortgage rates again this week. A lack of progress on reaching a deal caused investors to shift to safer assets such as bonds. As a result, mortgage rates ended the week a little lower.
The housing sector data released this week was again encouraging. November New Home Sales rose 4% from October to the highest level since April 2010 (when the homebuyer tax credit was about to expire). November Pending Home Sales, a leading indicator, also rose to the highest level since April 2010, and were 12% higher than one year ago. According to the NAR Chief Economist, "Home sales are recovering now based solely on fundamental demand and favorable affordability conditions."
Housing ends the year on a definite upswing. Existing Home Sales rose roughly 10% during 2012, and the National Association of Realtors (NAR) forecasts a similar increase for 2013. Total housing inventory of available existing homes is at the lowest level since 2005. The October Case-Shiller 20-city home price index showed an increase of 4.3% from one year ago. In addition, mortgage rates end the year near record low levels, around 50 basis points lower than this time last year.