In November, home prices in the U.S. increased because of three reasons: strong hiring growth, low mortgage rates and a shortage of houses on the market. According to an article in The New York Times, home values nationwide have almost recovered from the housing crash that set off the recession in 2006. Similarly, the strong Hiring Trend has a relationship with the increased home prices.
Over the past year, sales of existing homes rose to 6.5 percent to 5.26 million. Unfortunately, the rise in home values and a limited selection is not a good pair. Homebuyers are not looking to overpay, so without more listings, prices will continue to increase. However, in recent weeks, there seems to be a falling mortgage rate as a result of rising home values. The average rate on a 30-year-fixed-rate mortgage went down to 3.81 percent last week from 3.92 percent the week before. Historically, however, rates have averaged 6 percent; therefore, interest expenses are comparatively low.
In regards to consumer confidence, it has risen. The strong job market and low gas prices, makes Americans’ happy and therefore, consumer confident. Although there was a sharp decline in the stock market recently, consumers are taking that as a sign of economic weakness overseas. According to the business research group, Americans are more confident in their future.
With consideration to the impact of China’s plunge in the prices of commodities, the stock market has been slightly thrown off. According to the Conference Board, 6.6 percent of people that responded to the survey, plan to purchase a home in the next 6 months. This being the highest percentage since December 2013.
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