The housing market ended the year on an optimistic note, as the Commerce Department reports that November sales of new, single-family homes came in 16.6 percent higher than a year ago.
Meanwhile, potential buyers are tentatively emerging, with contracts to buy previously owned homes moving up slightly in November, the first increase in six months. The National Association of Realtors Pending Home Sales Index rose 0.2 percent from a month earlier.
How will higher rates affect sales?
Lindsey Piegza, chief economist at Sterne Agee, says the housing market appears to be on a positive track, but there is lingering concern over rising mortgage rates as the Federal Reserve tapers its bond-buying program. Other economic factors will need to counter the rise in rates. "Going forward, job creation and income growth will further propel new homebuyers into the marketplace for 2014," she says.
Mortgage rates took a jump in the latest Bankrate survey of large lenders: the 30-year fixed rate was up 6 basis points to 4.69 percent, while the 15-year rate gained 3 basis points to 3.73 percent. The fact that homes are selling despite rising rates is considered a positive sign by analysts, who are hopeful for an improvement in the underlying economy going into 2014.
Prices keep track with rates
Home prices have also been on the upswing. The median sales price of new houses sold in November was $270,900, up 10.6 percent from a year ago, according to the Commerce Department.
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