A weaker-than-expected December employment report sent interest rates lower, resulting in more home loan applications in early January.
Taking advantage of lower rates, homebuyers’ applications increased by 12 percent, and current homeowners also completed 11 percent more refinance applications, both figures up from the prior season, according to the Mortgage Bankers Association.
Home Prices Are Up, But Home Sales Are Down
In late January, data from the S&P/Case-Shiller index of property prices was released and showed a 13.7 percent year-over-year increase from November 2012 to November 2013 in home prices across 20 major cities.
Rising home prices, low mortgage rates and homebuyer demand are expected to drive the U.S. economy’s gradual recovery this year. U.S. home builders’ confidence stayed buoyant in January, according to the National Association of Home Builder’s monthly sentiment index, which ended at 56, with fifty being the difference between positive and negative.
While prices are up in many places, sales of new U.S. homes dropped more than December’s forecast, and cold weather across much of the nation was blamed for the poor homebuyer turnout.
New home purchases in December decreased 7 percent to a 414,000 annualized pace, lower than any estimates of economists surveyed by Bloomberg, Commerce Department figures showed. For all of 2013, demand jumped 16.4 percent from 2012 to 428,000 new homes sold.
For existing homes in the market, the National Association of Realtors reported that sales of previously owned homes climbed 1 percent in December, following a 4.3 percent drop in November. Overall, the housing industry ended 2013 on a high note, having its best year since 2008.
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