WatchThere were more signs that the housing sector continues to improve. Housing Starts surged by 12.1% in December to 954,000 units on an annualized basis. This was above expectations and the highest level since June 2008. Building Permits, a sign of future construction, also increased, coming in slightly higher than the November reading.
In addition, research firm CoreLogic reported that home prices rose by 7.4% in the year ended in November. This figure, which includes the sales of distressed properties, was the largest year-over-year increase since 2006 and it has been positive for nine straight months. Also, the Obama Administration's December Housing Report showed that home prices had solid annual gains for the year ended in October, with the Federal Housing Finance Agency (FHFA) and Case-Shiller housing price indices up 5.6% percent and 4.3%, respectively, from one year ago.
It's also important to note that RealtyTrac's year-end 2012 foreclosure report showed that foreclosure activity increased in 25 states. However, median home prices also increased in 25 states, which pulled 1.6 million homeowners out of negative equity in 2012.
So what's the takeaway? Goldman Sachs has reported that the fundamentals are pointing towards larger gains for housing prices in the next couple of years. And with home loan rates remaining near record lows, great opportunities are available.
But are home prices increasing too fast? CNBC’s Diana Olick comments on New Housing Fears.
Wow!!! We're approaching building 1M homes/year. That's not good. I'd rather see it stay in the 600k-700k range for a couple more years, but the market doesn't listen to me. What can I do? :)
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Well it's nice to know what's on the mend!
List of things that remain unmended would be
1. My income as it relates to home prices.
2. % tax as it relates to the fiscal cliff.
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donjumpsuit says
That's not a good situation to be in. If your income is not increasing with inflation, you're slowly falling behind. It's time to ask for a raise. You only get paid what you ask for, not what you're worth. Thank god I'm off the corporate ladder.
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E-man says
To be fair, 3.4% mortgage rates pulled homeowners out of negative equity. . . .
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Philistine says
Well, I cannot argue with your statement. Just got a $330k investment mortgage at 3.75% with $2,500 credit to pay for closing costs. Looking forward to refinance our home mortgage to 3.25%. :)
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E-man says
How sage. Something tells me you were a great big fan of Rich Dad Poor Dad.
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Philistine says
Exactly. It's like saying "Hey, that shot of morphine sure cured my gangrene!"
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JodyChunder says
You heard that wrong uncle. Robert Kiyosaki is nothing more than a con artist. I'm a fan of Sam Zell and Warren Buffett. :)
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E-man says
Ha! No, I could easily detect your Buffett worship, junior. Sorry to say, your hero is just another sleazoid bailout queen. I could give you a list the length of my inseam of truly great men far more deserving of your fandom.