More Positive News From Housing — Home Values Are Up in 4 of the Last 6 Months
According to the Federal Housing Finance Agency, after posting its first quarterly increase since 2007 this past September, the Home Price Index rose by another 0.6 percent in October.
But before we take the stats to the proverbial bank, it’s important that we recognize the Home Price Index for its shortcomings.
- HPI only accounts for homes with mortgages backed by Fannie Mae or Freddie Mac
- HPI only accounts for re-sold homes — newly-built homes are excluded
- HPI aggregates national data whereas real estate markets are local phenomena
On a broad scale, the Home Price Index can be useful, but it doesn’t specifically apply to Des Moines or any specific U.S. market. For that, analysts tend to turn to the Case-Shiller Index, a privately-produced report that assesses home values in 20 cities nationwide.
Potential Home Buyers-It’s Time
The good news for home sellers in Beaverdale is that Case-Shiller’s most recent report corroborates the government’s conclusion — home values are creeping back.
Home buyers should pay attention. When public and private sector data is in accord, markets tend to go along and, looking back, housing likely bottomed in February 2009. Since then, home sales are up, home supplies are down, and values have increased in most U.S. markets. Furthermore, so long as mortgage rates remain low and government stimulus is in place, the trend should continue through at least the first quarter of 2010.
If you’re on the fence about buying a home right now, or wondering about timing, consider your options vis-a-vis today’s market. Into the new year, homes won’t likely be as cheap to buy, nor to finance.
