| Approximately one year ago, a 30-year fixed rate mortgage was nearly 4.94%. Today, that 30-year rate sits near 3.60% and has rekindled optimism about the housing market to offset weakness in other areas of the economy. U.S. Housing Starts for October increased by 3.8% from September, and housing permits, which are a key metric for future construction, jumped to a 12-year high.|
Housing starts have advanced by 8.5% on a year-over-year basis in October with much of those gains occurring over the past months as the Fed has lowered interest rates three times in that time. Parsing the data, single-family starts, which accounts for the largest share of the housing market, rose for the fifth straight month and the more volatile multi-family sector also rebounded strongly.
Unfortunately, for those who are trying to buy a home in the greater Los Angeles area, the lower interest rates have been offset by much higher home prices over the past years. The median price of homes in the U.S. currently listed with Zillow is $289,000, and the median price of homes that have sold is nearly $237,000.
The median price of a home in the Los Angeles area is nearly $700,000 ($605,000 in California); the more desirable areas can be multiples of that number making home ownership out of reach for many and forcing more people to rent or for younger people to remain at home. Overall, low interest rates have helped the housing sector and have aided in the refinancing of older higher interest rates to help keep the economy growing and moving forward despite strains from the trade war.
| HERE ARE THE KEY NEWS STORIES FROM OVERNIGHT:|
- There was a lack of first tier data overnight. Global equities remain generally better bid overnight while G7 interest rates remain suppressed. The U.S. dollar is attempting to consolidate after three straight days of losses. Fed Chairman Powell’s meeting at the White House yesterday raised concerns for the U.S. dollar as two of the topics that were discussed were the use of negative interest rates and the continued strength of the U.S. dollar. The White House continues to pressure the Fed to keep rates low to help offset the ill effects of the trade war.
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