WICHITA,KS (WichitaKSRealty.News) According to one highly watched private measure of the health of the housing markets, U.S. home prices have recovered from the steep declines of the 2008 housing crisis. This, according to Standard & Poor’s CoreLogic Case-Shiller National Home Price Index. The report, released yesterday, puts home prices slightly above their peak in 2006.
As with all averages, this doesn’t mean that all housing areas have recovered. Certain areas remain weak, others anemic, while specifically the west coast has seen increases that have lifted the overall national averages. The largest annual gains have come from Denver, Portland, and Seattle.
This peak has at least one current headwind; increased interest rates in light of Trump’s election victory. With some areas seeing 30 year mortgages crest above 4 percent, this historically low rate is seen by many as a psychological barrier. It remains to be seen if this will have much impact on mortgage applications.
One area of concern has been that housing prices have far outpaced national earnings gains in the last 4 years. All things being equal, this has the possibility of holding back further gains. But, alas, all things never seem to be equal. With potential increases in inflation and interest rates comes pressure for wage increases, as well.
So the tug of war continues. Watch the Federal Reserve for hints of monetary policy, supply of homes for sale, inflation and the transition of President-Elect Trump to President Trump.