House prices south of the border are easing despite expectation that lower mortgage rates will boost demand.
The Federal Housing Finance Agency’s House Price Index shows a 0.3% rise in February compared to the previous month; January’s month-over-month growth was twice as much at 0.6%.
Year-over-year price growth was 4.9% in February according to the Index, which is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.
FHFA House Price Index: U.S. house prices up 0.3% in February, up 4.9% YoY. Report -- > https://t.co/mKI9PGfXOt pic.twitter.com/N6lOGbTRne
— FHFA (@FHFA) April 23, 2019
Things set to improve?
Mortgage rates started the year lower after rising in 2018, following the Fed’s call for ‘patience’ over further hikes after increasing interest rates in December.
Realtor.com has updated its outlook for 2019 with a forecast of mortgage rates to end the year at 4.5%, down sharply from the 5.5% it was forecasting in the Fall of 2018.
It’s outlook also shows a rise in prices of 2.9% in 2019 (compared to a 2.2% forecast in Fall 2018) and a less pessimistic 0.3% decline in home sales compared to its previous call for a 2% decline.
But an analysis by Zillow says that housing inventory is growing, not because of more sellers listing their homes, but due to weaker demand.
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