Housing Market is a Bright Spot in the U.S. Economy
Last week multiple national financial news outlets reported that home prices pushed higher, fueled by the combination of low interest rates and limited inventory, further emphasizing that what we have been saying about our Southern California market is happening in cities across the United States. The S&P CoreLogic Case-Shiller index of property values increased 3.9% from 2019, beating the estimate of 3.6%. It was the biggest year-over-year increase since December 2018.
“Over the past months we have seen this trend in our Southern California markets,” says Linnea Arrington, President San Diego Funding/Great Pacific Funding.”We see no signs of a downturn in home prices and expect them to remain strong because of the combination of low interest rates, strong buyer confidence, and lack of inventory in the market."
With the Federal Reserve's announcement redefining how they will support the economy over the next three years by keeping interest rates low until labor market conditions return to the “maximum employment” and inflation has reset to 2% and their commitment to the purchase of mortgage-backed securities, home values and the demand for housing is expected to continue to rise.
There is strong buyer confidence in the real estate market as homeownership is now seen as a safer investment than the stock market. People are taking their money out of the stock market and their retirement accounts to purchase homes.