Thursday, February 23, 2017 - Article by: Mark Hemingway - Security Financial Services, LLC -
The Dow Jones Industrial Average began the day with nine straight record high closes beginning at 20,775.60, while the S&P and NASDAQ are right near record highs. The major indices have been driven higher by positive corporate earnings, better-than-expected economic data, and President Donald Trump's election promises of lower taxes, reduced regulations and higher infrastructure spending. In comparison, the Dow closed at 6,547.05 back on March 9, 2009, the height of the great Recession.
The Federal Housing Finance Agency reported on Thursday that its Home Price Index rose 0.4% from November to December, despite the rise in mortgage rates since early November. The Home Price Index is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. In addition, U.S. house prices rose 1.5% in the fourth quarter of 2016, and are up 6.2% from the fourth quarter of 2015 to the fourth quarter of 2016. Although interest rates rose sharply during the fourth quarter, our data show no signs of a home price slowdown," said FHFA Deputy Chief Economist Andrew Leventis.
Mortgage rates edged higher in the latest week, though still remain historically low. They seem to have topped out for now after the sharp rise since the presidential election. Freddie Mac reported that the 30-year fixed conventional mortgage rate ($424K or less) rose to 4.16 this week from 4.15% with 0.5 in points and fees. The 15-year fixed-rate mortgage averaged 3.37%, up from 3.35%. Back in the early 1980's, the average rate was around 18%.
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