MORTGAGE RATES ARE DOWN… EVERYTHING ELSE IS UP!
Are reduced rates driving up Consumer Confidence, Prices and Sales?
The market has three positive trends forming for a good year – 2014.
The return to lower rates may be driving the upturn of Lake Arrowhead real estate economy. it sure looks like it. In my role beyond selling real estate, my marketing / amateur economist duty is to answer the daily question, “Are prices up yet… how much… how long will it last this time”?
Focusing on the last six months, as the most recent turn of the economy, on the right side of each chart we see first, the steady decline of mortgage rates from 4.7% last Fall / Winter to 4.3% in the past few weeks.
Since last December, Consumer Sentiment rose to 82.0, a very encouraging break-point – the blue dotted line – marking a positive attitude for the third time in nearly two years.
Prices shot up 23% in Arrowhead Woods since the first of the year, two thirds of the gain in April, an unsustainable rate, but clearly a full blown return to a strong market here on the mountain.
Sales are mind boggling – dropped like a rock through Winter – and now recovering – so rapidly the decline may have been an overreaction. Little wonder that sellers and buyers may be confused. Buyers withdrew from the market responding to skyrocketing mortgage rate rise to 4.7% virtually overnight.
HOPE. The Fed appears to warming to holding mortgage rates down.