John’s Finance Corner: Home Prices Show Signs of Strength Despite Limited Data
With the government still partially shut down, economic data remains limited but the housing sector is giving us a few encouraging signals.
According to CoreLogic’s (formerly Cotality) latest Home Price Insights report, national home values declined by just 0.3% in August yet remain 1.3% higher year over year. Meanwhile, ICE’s September data showed a 0.17% monthly increase, translating to a 1.2% annual gain the first rise in home price appreciation in eight months. That’s a promising indicator for markets heading into fall.
Home values are largely shaped by supply and demand, and the dynamics are starting to improve. ICE reports that falling mortgage rates have boosted affordability to its best level in 2.5 years, drawing more buyers back into the market. This uptick is reflected in higher contract signings and increased mortgage application activity.
Looking ahead, CoreLogic forecasts a 3.9% increase in home values over the next 12 months, suggesting expectations for continued rate relief, strong buyer demand, and tight inventory through the fall and winter months.
On the interest rate front, the Federal Reserve’s September 17th meeting minutes revealed a quarter-point cut to the Fed Funds Rate. This move underscores the Fed’s attempt to strike a delicate balance between persistent inflation and signs of a softening labor market. The central bank continues to walk a fine line inflation remains above target, yet the broader economy is showing signs of slowing.
Complicating the picture is the ongoing government shutdown, which has delayed key inflation and employment reports that typically inform the Fed’s decisions. With less data available ahead of the October 29th meeting, economists still anticipate another quarter-point rate cut, but the uncertainty surrounding the economy’s true strength remains high.
As always, I’ll be keeping a close eye on how these trends develop and what they could mean for homebuyers, homeowners, and the broader mortgage market.
John Lamberg
MORTGAGE LOAN ORIGINATOR
NMLS 189233
