Home Prices On The Rise, Says The October Home Price Index Report

More positive signals from housing -- home values are still on the rise.

According to the Federal Housing Finance Agency, after posting its first quarterly increase since 2007 this past September, the Home Price Index rose by another 0.6 percent in October.

Prices are up in 4 of the last six months.

But before we take the stats to the proverbial bank, it's important that we recognize the Home Price Index for its shortcomings.

1. HPI only accounts for homes with mortgages backed by Fannie Mae or Freddie Mac
2. HPI only accounts for re-sold homes -- newly-built homes are excluded
3. HPI aggregates national data whereas real estate markets are local phenomena

On a broad scale, the Home Price Index can be useful, but it doesn't specifically apply to Plymouth or any specific U.S. market.  For that, analysts tend to turn to the Case-Shiller Index, a privately-produced report that assesses home values in 20 cities nationwide.

 

The good news for home sellers is that Case-Shiller's most recent report corroborates the government's conclusion -- home values are creeping back.

Home buyers should pay attention. When public and private sector data is in accord, markets tend to go along and, looking back, housing likely bottomed in February 2009.  Since then, home sales are up, home supplies are down, and values have increased in most U.S. markets.  Furthermore, so long as mortgage rates remain low and government stimulus is in place, the trend should continue through at least the first quarter of 2010.

If you're on the fence about buying a home right now, or wondering about timing, consider your options vis-a-vis today's market.  Into the new year, homes won't likely be as cheap to buy, nor to finance.

Moving To A New City? Check The Local Cost Of Living First.

It's not only the real estate markets that differ from town to town -- the Cost of Living does, too.

Insurance costs, tax bills and just plain, day-to-day living will dent a household budget differently depending on where that household is.  It can be a nerve-wracking fact for families moving from Minnesota across state borders.

As an aid for the budget-aware, Bankrate.com keeps a Cost of Living Comparison Calculator on its website.  The calculator asks 3 questions: (1) Where do you live now, (2) To where you are moving, and (3) What is your salary.  It then spits out a detailed, 58-item cost comparison list between the two cities.

Some of the key costs compared include:

• Everyday groceries
• Energy bills
• Routine healthcare
• Home ownership
• Clothes
• Sporting goods

The Cost of Living Comparison Calculator is thorough, with data culled from the ACCRA. You'll be surprised at how granular the list can get. On the ACCRA website, you can buy a similar report for $5.

On the Bankrate.com site, the data is free.

What's Ahead For Mortgage Rates This Week : December 28, 2009

Mortgage markets made a 4-day losing streak last week on thin holiday volume and overall economic optimism. It was awful news for rate shoppers in Minnesota because mortgage rates were higher every day last week.

The holiday-shortened week marked the third out of 4 during which rates worsened and last week's action happened to be especially harsh. Monday's action was the worst for rates since July, for example. 

Tuesday's was only slightly less worse.

Today, conforming, 30-year fixed mortgage rates have reached at a 15-week high -- well off the lows set in early-December.

Normally, when mortgage markets worsen this badly, this quickly, it's because of strong economic data, or growing inflationary expectations.  Last week saw neither.

• Existing Home Sales showed strength, but was offset by New Home Sales
• 3rd Quarter GDP showed the economy growing at a slower-than-expected pace
• Inflationary data wasn't as high as was expected

Furthermore, consumer confidence didn't rise as planned.

And yet -- stock markets gained. All 10 sectors improved and they did so at the expense of mortgage bonds.

This week is again holiday-shortened so expect the same low-volume, high-volatility trading as last week.  There's few data releases save for Tuesday's Case-Shiller Index. Therefore, watch for momentum trading in either direction.

Markets close early Thursday and re-open Monday, January 4, 2010.  If you need to lock a rate, make sure of your loan officer's hours.