Buying a home is proving to be one of the smartest financial decisions consumers can make, as home values are appreciating significantly in a solid swath of the country, new findings suggest.
In more than a quarter of the U.S., home values have never been higher than they are today, according to a recent study conducted by home listings website Zillow. More specifically, 26 percent of mortgaged properties are commanding top-dollar, predominantly in the high six figures. This includes Dallas at a median of $180,700 in February, $146,100 in Louisville and almost $793,000 in San Francisco. The gains recorded were all in the double-digits, most notably Dallas up nearly 14 percent from year-ago levels.
Svenja Gudell, chief economist, indicated that it's a new morning in America for the country's residential real estate well-being.
"These new records mean we're no longer making up ground lost during the housing recession," Gudell explained. "We're laying a new path forward, based on demand for housing and economic growth throughout the economy."
Zillow's chief economist went on to note that in some markets, double-digit increases aren't an aberration, but the norm, some of the value-added gains are a return to what had been prior to the housing crisis.
Dallas isn't the only major metropolitan statistical area where prices are higher than they've ever been before. The same is true in Boston, at a median of $384,700, Zillow reported. San Antonio, Charlotte, Columbus, Ohio and Portland, Oregon also recorded all-time highs.
Higher prices: Both good and bad?
Home price growth can be a double-edged sword in the residential real estate arena. On the one hand, they're a sign that the market is healthy and can bring a sizeable return on investment for those who decide to sell their properties. But they can also have a chilling effect if list prices get so high as to make homeownership cost prohibitive.
Mortgage rates have enabled the best of both worlds to exist, even though financial experts had predicted rates would rise in 2016 after decisions made by the Federal Reserve. For the duration of the year, 30-year fixed-rate mortgages have stayed well below 4 percent, according to Freddie Mac's weekly Primary Mortgage Market Surveys. For the week of March 31, the latest period that data is available, 30-year FRMs averaged 3.7 percent, on par with year-ago levels and virtually unchanged from the immediately previous seven-day stretch.
Interest rate growth predictions on hold
Economists had forecasted the Fed likely raising interest rates in 2016 after a quarter percent uptick in December. That hasn't come to pass, though, in light of financial market volatility at the international level.
Sean Becketti, Freddie Mac's chief economist, said Fed chair Janet Yellen gave intimations in her latest speech on March 29 that short-term interest rates won't be rising any time soon. If her more cautious tone continues, mortgage rates could start to slide again after recording slight increases over the last several weeks.
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