Inventory Shortage

As seen in the Business section of the SD Union Tribune Sunday 2/19/ 2017 Shortage of inventory, shorter time on the market, 2016 favored sellers San Diego County’s housing market hasn’t fully recovered from the recession, but it is getting close. Last year 23 zip codes hit new high median home prices, according to real estate

Equity keeps growing

Total home equity grew 11.4 percent to $13.018 trillion between the third quarter of 2015 and the third quarter of 2016. The share of mortgaged homes in a negative equity position has dropped from 13.3 percent in 2013 to 6.6 percent in 2016 – eyeonhousing.org

Rising tide

Home prices rose 7.7 percent in November, the largest year-over-year increase in 14 months. Home sales rebounded from a tepid October with a 20.1 percent gain, the biggest jump since July 2015. More buyers chased fewer homes as inventory fell 9.7 percent from last year, the largest drop in supply since July 2014. –Redfin

“With the California economy continuing to outperform the nation, the demand for housing will remain robust even with supply and affordability constraints still very much in evidence. The net result will be California’s housing market posting a modest increase in 2017,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “The underlying fundamentals continue to

Throughout 2016, U.S. housing prices continued to rise by about 5% year-over-year, adding to the cumulative gains made since the lows of 2011. Nationally, home prices now stand above the pre-crisis peak, as measured by the S&P CoreLogic Case-Shiller U.S. National Home Price Index. However, the recent trend toward higher interest rates has raised concerns

“The healthiest job market since the Great Recession and the anticipation of some buyers to close on a home before mortgage rates accurately rose from their historically low level have combined to drive sales higher in recent months,” NAR Chief Economist Lawrence Yun said.

Higher Rates Lower Affordability

While higher rates have so far had a fairly benign impact on financial markets, they have led to an increase in mortgage rates. Higher mortgage rates can decrease housing affordability, and thus have the potential to lower the demand for home purchases. According to Bankrate.com, the average national rate for a 30-year fixed mortgage was

 Home builders reported a significant boost in confidence after President-elect Donald Trump won the election, according to the National Association of Home Builders/Wells Fargo Housing Market Index, leading some to believe that it could push new home builds up in 2017.