As is often the case with economic figures, we may not know that we are out of the declining housing market until we are clearly above the stabilization line. There are key housing reports release each month for such areas as pending home sales, new home sales, and new construction, but these reports have left everyone wondering what the true direction of the housing market is.
It does appear that some key indicators are turning up positive, such as inventory reduction and a decrease to the days on market. Yet the positives are being jabbed by a continuous decrease in home values across the nation. In a nutshell, the reports have been telling us that people are buying up bargain priced homes and foreclosures. Historic low mortgage rates combined with the homebuyer tax credit have really helped to prop home sales.
This is fine and expected as a path is worn toward stabilization in housing prices along with supply and demand. What is still unknown is the true number of foreclosures still to hit the market. With the end of the government home buyer tax credit coming soon, along with the potential for mortgage rates to rise, we could possibly be in line for another dip in the housing market.
Employment figures are still dismal and it appears that consumer spending has been the saving grace for our economy this year.
Mortgage refinance rates have increased slightly over the past week as the treasury yields dipped up a bit. Still, rates are in great shape for the time being. I see immediate risk of a rise to refinance rates if the 10- Year Treasury Yield surpasses the 4.0 percent mark.
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