Over the last four months, interest rates on fixed-rate mortgages have moved up and down a little over a quarter percent.  On the good side of things, inflation appears to be under control.  In 2006, consumer prices only increased by 2.6%, after increases of 3.3% in 2004 and 3.4% in 2005. On the bad side, mortgage defaults and foreclosures are up.  Much of what drove the economy in the early 21st century was increased equity in homes and the ability to borrow in order to spend.  We aren’t counting on the possibility that home prices have yet stabilized.

Fed chairman Bernanke seems concerned about the future federal deficit.

Fixed-rate mortgages may trend upward in the near-term, though not dramatically.

Home Prices Stabilize?

Nationally, the median average sales price was the same this month as it was precisely one year ago. 

Prices went up 3.66% in the Northeast and 1.45% in the West.  They were flat in the South and declined by 2.91% in the Midwest.  It will be interesting to see next month’s data.

The median price is the midpoint sales price.  Half the homes sell above the median price and half sell below.