Home Prices to Rise in 2010
According to a recent poll by Reuters, U.S. house prices will manage a small gain in 2010. Home sales and prices may retreat slightly in the near-term after government tax credits to homebuyers end. But that trend will be countered by historically low mortgage rates and the fact that housing affordability is now near the best it has ever been. This is likely to put prices back on a slow path upward.
Three-quarters of the economists that were polled said it was possible for the average home price to return to where they were in 2006 - before the crash. That would require a rise of more than 40 percent and will still take a long time. Home prices as measured by the Case-Shiller 20 city index should rise 1.4% this year and 3% next year according to the economists' median forecast.
Most States Show Improvement in Jobless Rates:
Most states across our country saw an improvement in employment in April as jobless rates dropped from the previous month, according to government data released on Friday.
34 states and the District of Columbia saw their rates decrease in April from the previous month. Only six states saw increases and 10 states had no change in their unemployment, according to the Labor Department.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +56 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans to their best levels of 2010. MBS pricing increased (which causes mortgage rates to go down) due primarily to concerns about a default by Greece and the instability and uncertainty over the future of the European Union. This is a very rare event, as it is the first time since the formation of the EU that their system has been tested. This is helping to push massive amounts of international funds into our Treasuries and our mortgage backed securities and temporarily pushing 30 year fixed rates to record lows.
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