Posted March 25, 2014

Low Mortgage Rates Help Boost Home Values To Highest Points In 68 Months

In spite of low sales volume nationwide, U.S. home values continue to climb

In spite of low sales volume nationwide, U.S. home values continue to climb

The U.S. housing market turned in another strong month in January.

According to the Home Price Index, a monthly housing metric from the Federal Home Finance Agency (FHFA), U.S. property values climbed another half-percent to start the new year, staying strong after 10 straight quarters of national home price growth.

As compared to one year ago, home values are up more than 7 percent nationwide. And, despite lower sales volume and a rising stock of homes for sale, values were up in January, too. Today's home buyers are finding it hard to locate housing market "bargains".

Buying a home in 2014 or 2015? Consider buying before the spring season gets too far underway. Home affordability is expected to weaken.

Click to skip to today's live mortgage rates

Home Price Index : Best Levels Since Summer 2008

The FHFA Home Price Index is a government-published home-valuation tracker. It tracks the change in a given home's value between subsequent sales, using data supplied to Fannie Mae and Freddie Mac in the mortgage approval process.

The index is benchmarked to a value of 100, which is meant to represent the U.S. housing market as it existed in 1991.

In January 2014 -- for the first time since June 2008 --- the Home Price Index topped 209, putting the index at its highest point in more than five years. This is significant because June 2008 was just thirteen months into last decade's housing downturn. Home values had not yet dropped in many U.S. markets. 

January's reading hints that the market's complete recovery may be near.

Demand for homes is currently high and home supply remains relatively low. The combination is moving list prices up, and making homes more expensive.

Ask any of today's active home buyers -- it's tougher to find a great, cheap home as compared to this time six months ago. This is especially true in California. Many of the nation's top-appreciating markets are in the Golden State.

Buyers can take solace in low mortgage rates, however. 

Since the start of the year, mortgage rates are down close to one-eighth percentage point and low-downpayment mortgages remain readily available. Purchasing power remains strong.

Click for today's live mortgage rates.

Middle Atlantic Region Gains Most, Led By New York

The FHFA's Purchase-Only Home Price Index rose 0.5 percent in January 2014 -- up 7.4% from one year ago. The index is at its highest point in more than 5 years.

Like everything in real estate, though, home values are a local phenomenon. National indices such as the Home Price Index can't capture the detailed buyer-seller activity of any one state, let alone a specific city, neighborhood or street.

Property values differ on a home-by-home basis.

The HPI manages to group its findings by region, however, and, in January, the Middle Atlantic Central Region led all U.S. markets, adding 1.3% percent. The West South Central Region was the laggard, losing three tenths of one percent.

On an annual basis, the results are more even. 

  • Pacific : +14.0% (Hawaii, Alaska, Washington, Oregon, California)
  • Mountain : +11.0% (Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona)
  • Middle Atlantic : +3.2% (New York, New Jersey, Pennsylvania)
  • East North Central : +6.0% (Michigan, Wisconsin, Illinois, Indiana, Ohio)
  • South Atlantic : 8.4% (Delaware, Maryland, District of Columbia, Virginia, West Virginia, North Carolina, South Carolina, Georgia, Florida)

The East South Central Region gained +4.9% over the past year. The region includes Oklahoma, Arkansas, Texas, Louisiana. 

How Much Home Can You Afford?

Home prices climbed through all of 2012 and all of 2013. Now, as 2014 kicks off, values are rising again. Now, should mortgage rates start to climb, too, the amount of home you can afford in 2015 may be markedly less than what you can afford today. 

Know your options and know for how much home you qualify. Pre-approvals and live rates are available at no-cost, with no-obligation, and there's no social security number required to get started.

Click here to get today's mortgage rates.

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

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