Mortgage rates started the week quietly, which is good news for borrowers. But the same can't be said about home prices.
The yields, or rate of return, on the 10-year Treasury note have increased slightly to 2.65 percent from 2.63 percent since Friday. Mortgage bond yields also are up slightly, but that shouldn't be enough to push rates up yet.
Watch retail numbers
But that could change tomorrow when the U.S. retail sales numbers are released. A strong retail report could fuel investors' optimism and trigger slightly higher rates.
Home prices rise
Even if rates stay still, buying a home continues to get more expensive.
The median price of previously owned homes increased in almost three-quarters of the metropolitan areas tracked by the National Association of Realtors, according to its quarterly home price report. The national median single-family home price was $191,600 in the first quarter. That's up 8.6 percent from the first quarter of 2013.
But at least prices rose at a slower pace than in the last quarter, when prices were up 10.1 percent from a year earlier.
"The cooling rate of price growth is needed to preserve favorable housing affordability conditions in the future, but we still need more new-home construction to fully alleviate the inventory shortages in much of the country," says NAR chief economist Lawrence Yun.
Most expensive markets
The shortage of homes for sale is contributing to "unsustainable and unhealthy price growth in some large markets," including on the West Coast, he adds.
About 37 metro areas saw a double-digit increase in prices. The three most expensive housing markets in the first quarter were:
- San Jose: $808,000
- San Francisco: $679,800
- Honolulu: $672,300
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