January 2016 Real Estate Market Update

    January 2016 Market Update
    Home sales dropped sharply in November according to the National Association of Realtors; however, the majority of this drop is likely an artifice of delayed closing times created by the implementation of changes in documentation by the Consumer Financial Protection Bureau. Prices and the number of homes on the market held relatively steady, supporting that many of the sales that would have been reported in November will likely be pushed into the December month. At the end of December, the Federal Reserve announced its first rate hike of 0.25%, giving good indication that mortgage rates will be on the rise in the coming year.
    Interest Rates

    Interest rates held steady in December as the Federal Reserve’s change to the base rate was anticipated well in advance. Currently, Freddie Mac reports the following figures: 30-year fixed rate, 3.96%; 15-year fixed rate, 3.22%; 5/1-year adjustable rate, 3.06%.

    Home Sales

    Homes sold at a seasonally adjusted annual rate of 4.76 million homes in November, a decrease of 10.5% from October and a decrease of 3.8% from the same month last year. Until December home sales are released it will be difficult to decipher to what extent the drop in sales was caused by the new Truth in Lending and Real Estate Settlement Procedures form integration but it is likely the primary cause of the large decrease. If this is the case, sales in November were likely in the 5 million- plus range, but due to closing delays, many of the homes that would have been recorded in November as sales won’t be recorded until December.

    Home Price

    Home prices increased slightly in November to $220,300 according to NAR. This was an increase of 0.5% from October and a year-over-year increase of 6.3%. 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 November was down 2% 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 to 5.1 months due to the drop in sales.

    Real Expert. Real Neighbor. Real Estate.
    Brought to you by KW Research. For additional graphs and details, please see the This Month in Real Estate PowerPoint Report.The opinions expressed in This Month in Real Estate are intended to supplement opinions on real estate expressed by local and national media, local real estate agents and other expert sources. You should not treat any opinion expressed on This Month in Real Estate as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Keller Williams Realty, Inc., does not guarantee and is not responsible for the accuracy or completeness of information, and provides said information without warranties of any kind. All information presented herein is intended and should be used for educational purposes only. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. All investments involve some degree of risk. Keller Williams Realty, Inc., will not be liable for any loss or damage caused by your reliance on information contained in This Month in Real Estate.


    Trackback from your site.