Growing Demand and Higher Home Sales

SoCal-based financial information company CoreLogic recently offered its real estate market forecast for 2016 using their widely cited Home Price Index (HBI). Much like other forecasters, CoreLogic expects a rise in home sales and prices next year, as demand for housing continues to grow.

According to this report, “the improved macro-economy has brightened the financial outlook for many Californians and enhanced their sense of financial security.” As of this year, home buying activity has the potential to lift Californian home sales to a level not seen since 2007 (before the housing market collapsed). Prices are also expected to rise faster than inflation, albeit slower than last year, in 2016. Popular opinion among industry professionals is that strong demand will drive prices up in 2016, but at a more steady cadence than 2015. In essence, 2016 could see additional but smaller home-price gains in California.

5.1%, the Positive Growth of Home Prices in the Month of August

The pace steadily rose in August from the same time last year. It’s a sure sign that the housing marketing is improving in spite of an overall slowdown in our economy.

The Standard & Poor's/Case-Shiller 20-city home price index rose 5.1% in the 12 months ending in August, according to figures released Tuesday. That's up from a 4.9% pace in July. 

Home prices have risen at a 5% pace for the better part of this year, which economists define as more sustainable than last year's double-digit gains. This can be attributed to a few specific factors: three years of solid hiring and historically low mortgage rates have enabled more Americans to buy homes. That's helped by lifting sales of existing homes nearly 9% in just the past year. 

“Sales of existing homes jumped 4.7% in September to a seasonally adjusted annual rate of 5.5 million. That's a reassuring sign that the housing sector has so far been insulated from weaker growth overseas that is slowing growth in the U.S. manufacturing and energy sectors.”

Application Volume Up, Down, Up, Down...

The Mortgage Bankers Association said today that applications during the week of October 23rd decreased at roughly 3.5% -- adjusting seasonally from the previous week.

Granted the accounted for data increased 7% on an unadjusted basis, taking into account for Columbus Day. While this news is not shocking, the Refinance Index decreased 4% from the previous week, remaining the same in comparison to the week prior at 59.4%. Applications for government backed mortgages also tapered off slightly from higher levels last week. The share of FHA decreased from 14.3% to 13.7%. 

Is now a good time to refinance? Yes. For more homeowners, it’s still a good time to refinance. Interest rates have risen from the record lows we witnessed a couple of years back, but mortgages remain incredibly cheap in comparison. Reach out to your loan officer today to go over your situation to see if there is room to save money.