According to the latest Case Shiller Home Price Index, prices have gone up 5.5% over the past year. Increases have been reported in 19 out of 20 metropolitan areas. Continued appreciation is expected over the next five years.
After reaching record lows in 2012, mortgage rates are expected to increase to 4.4% in 2013, according to the Mortgage Bankers Association. In the past few months, rates have increased by about 2/10 of a point.
Over the past year, rents have skyrocketed across the U.S. Zillow reports an increase of 4.2% in general, with increases reaching more than 5% in major metropolitan areas such as San Francisco and San Jose.
Regulators are currently drafting the new Qualified Residential Mortgage (QRM) rules. The new rules are expected to be more stringent for two major requirements: minimum down payment and minimum FICO score.
In our local Berkeley/Oakland market we are seeing housing prices return to 2007 and 2008 levels. If you are a homeowner who has been waiting for the market to improve before you sell, now may be the time. If you are a prospective buyer, you may want to consider buying into a stabilized housing market before interest rates rise.