Last week’s economic news with regards to the direction of the economy and home mortgage interest rates was mixed. On the positive front, New Home Sales rose 3.5 percent from May to June according to the Commerce Department. Year-over-year New Home Sales have experienced a 25.4 percent gain from June of 2015, which is is the highest level since February 2008.
Dallas had the fourth-highest year-over-year home price increase among 20 major U.S. cities in April. Dallas-area home prices were up 8.6 percent in April from a year earlier. Keep in mind this is among the biggest gains in a nationwide comparison. The Dallas area had the fourth-largest home price increase in the country according to Standard & Poor’s/Case-Shiller Home Price Index.
Supply and Demand
So what’s boosting DFW home prices? Well, it’s supply and demand. The shortage of homes for sale in the DFW area’s booming economy is credited with raising local home prices to new record highs.
According to Jim Gaines, the top economist for The Real Estate Center at Texas A&M University, he predicts that the North Texas home market will continue to surge through the end of 2016. Gaines said, “Dallas is still going almost great guns and will for the rest of the year.”
Cautious Optimism — No, Just plain Cautious
On the flipside of the New Home Sales figures is the first reading of second quarter Gross Domestic Product (GDP). This report is the value of the goods and services produced in the United States.
The GDP indicated that the U.S. economy might be slowing even further than it’s anemic limp that we’ve already been muddling through for the last several years. The first look at second quarter GDP came in at a paltry 1.2 percent, which is well below the already downgraded estimates of 2.6 percent. The ideal GDP growth rate in a healthy economy is between 2 and 3 percent.
Buying or Refinancing?
For now mortgage home loan rates remain historically low. If you are considering purchasing a home or refinancing, now is the time to secure a low interest rate.