October 2015 Real Estate Market Update

FREMONT, Calif. - Sept. 28, 2015 - PRLog -- October 2015 Market Update

Homes sales increased in September while inventory levels remained tight. Inventory typically reaches its low point during the winter months, but the current level is well below that of last year. This led to higher than expected home price increases. While home price gains are good for homehowners, it will be important for inventory to loosen in the coming months to avoid constraining home sales and driving down affordability ahead of the potential for rising interest rates.

Interest Rates

30-year rates remain below 4% but have begun to trend back upward after dropping in the second half of last year amid concerns around the global economy. Currently, Freddie Mac reports the following figures: 30-year fixed rate, 3.78%, 15-year fixed rate, 3.06%, 5/1-year adjustable rate, 2.97%.


Home Sales

The seasonally adjusted annualized rate of home sales increased 1.2% from January to February to a pace of 4.88 million homes. Home sales increased year-on-year in February for the fifth month in a row and were 6.1% higher than the same month of the previous year.

Home Price

The median home price reported by the National Association of Realtors increased 2.5% in February to $202,600. Prices remain 7.6% higher than the same month of the previous year. The recent uptick in year-over-year price growth is probably due to low inventory levels in recent months.

Inventory

The number of homes available decreased 8% compared to the same month of the previous year, with 1.89 million homes available for sale in February. This translated to 4.6 months of supply. Historically, inventory typically remains low during March due to the cool weather and then loosens as the weather warms in April.

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