Home sales slowed in October as inventory remained tight and prices continued their seasonal decline. As the end of the year approaches, consensus among economists is that the Federal Reserve will likely increase interest rates in December, making a trend of rising mortgage rates likely in the coming year.
Interest rates began trending up in November amid speculation of a rate increase by the Federal Reserve in December. Currently, Freddie Mac reports the following figures: 30-year fixed rate, 3.97%; 15-year fixed rate, 3.18%; 5/1-year adjustable rate, 2.98%.
Homes sold at a seasonally adjusted annual rate of 5.36 million homes in October, a decrease of 3.4% from September and an increase of 3.9% from the same month last year. Tight inventory is likely weighing down sales late in the year and could be a persistent headwind through the colder months of the year.
Home prices continued their seasonal decline in October as the median home price declined to $219,600 according to the National Association of Realtors. This was a decrease of 0.9% from September and a year-over-year increase of 5.8%. As we move into the winter months, we should begin to see some seasonal alleviation on prices; however, year-over-year gains will likely remain strong.
The actual number of homes for sale in October was down 4.5% compared to the same month of the previous year. This led to the months supply of inventory, which measures the relationship between supply and demand, to rise slightly to 4.8 months due to the drop in sales.
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Author:Sherry Cabrera Phone: 214-454-6969 Dated: December 14th 2015 Views: 775 About Sherry: Sherry was raised in Mississippi and moved to Dallas 16 years ago with her daughter. Prior to movin...