While homeowners, current and prospective, yearn for low rates of previous years, market experts see them as manageable–something the real estate market will eventually adjust to, which could drive DRN.
“Some people are just used to the exceptionally low rates,” said Yun. “It is an increase, but I would say by historical standards we remain at a very manageable level.”
Sun Not Shining on Southern California Real Estate
The Southern California housing market, in particular, has taken a hit with the number of home sales, new and existing, dropping to a level not seen in over a decade. Data from the National Association of Realtors show that the Quarterly Housing Affordability Index has been dropping thanks to the national rise in median home prices.
According to the National Association of Home Builders (NAHB), the housing market represents roughly 15-18% of the gross domestic product. Needless to say, the central bank and the rest of the capital markets will take notice of what real estate does–and so will DRN and DRV traders.
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