As the Federal Reserve prepares to announce its next monetary policy, housing markets around the country are experiencing record levels of volatility, according to a new report.
The National Association of Realtors report shows that the U.S. housing market is now on pace to exceed the record highs reached in October 2007, according a statement from the group.
The numbers in the report also show that a new round of record-low interest rates will continue to help drive home prices and help create jobs.
“We’ve got another year of record low interest rates.
We’ve got one more year of low rates.
And so, it’s been a pretty consistent theme.
We’re on track for record lows,” said David Goldwyn, chief economist at the Realtor’s Institute.
The market has been especially volatile since the Federal Housing Administration announced in January that it was considering raising the threshold for refinance offers from 60 percent down to 75 percent.
In March, it raised the threshold to 75% and in November, the Fed raised the rate by 1.75 percentage points.
The rate at which a mortgage borrower can get a home loan has been at its lowest level in decades.
On Tuesday, the New York Fed said that the federal funds rate was now 2.25 percent, which would have lowered it to 2.04 percent on Thursday.
The Fed also said that it is also reviewing its long-term refinancing program, which it said in a report that “has the potential to increase affordability and help to reduce the housing affordability crisis.”
However, the new data show that home prices have been on the rise in many parts of the country.
“It’s just been so much better than last year, it seems, in terms of what the market is looking at,” said Jefferies Senior Research Analyst Michael Deveney.
He said that some parts of America have seen significant price gains, while others have seen a sharp drop in the number of homes available.
“In some places, there’s been some sort of slowdown,” he said.
In the San Francisco Bay Area, where housing prices are up nearly 30 percent from last year and there are more than 1.4 million listings, the median price of a single-family home is now $1.5 million.
But Devenay said that if you look at other parts of California, prices are rising faster than the rest of the state.
“You’ve got a lot of California where prices are getting up and down.
In some places you’ve got houses up to a million and even a million-and-a-half,” he added.
Devensey added that it’s difficult to determine how much the market has changed over the past year because many of the numbers are not comparable to the past.
He noted that the average home price in San Francisco is about $1 million, but in Los Angeles it’s about $2.6 million.
“There’s still a lot more inventory in some areas than in others.
There’s still some over-the-top stuff going on.
But prices are actually trending upwards,” he explained.
However, some analysts, like Mark Zandi, chief economic strategist at Moody’s Analytics, said that prices could continue to rise in the months ahead.
“I think that’s going to continue for the foreseeable future,” Zandi said.
Develay, however, said the current conditions are “not conducive to sustained gains.”
“This is a very short-term problem.
It’s a long-run problem.
The economy is still in a period of rapid growth.
This is a time of very tight credit conditions.
There are still some constraints on the supply side,” he noted.