Weekly Economic summary from Bank of America

Last week, there were more signs that the housing sector continues to improve. Read on for details.
Table Source: Mortgage Success Source

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. 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 calendar year that 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.

 

What’s the takeaway? 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 has negative effects on bonds, and, therefore, on 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.

It continues to be a great time to consider a home purchase or refinance, as home loan rates remain near historic lows.

For more information on the real estate market on Marco Island, please call me at 239-404-7471 or visit my website for a complete guide to available property.