Mortgage Applications Retreat as Rates Creep Higher | ETF Trends

Homebuilder Sentiment Rising

Just last month, the National Association of Home Builders/Wells Fargo Housing Market Index hit a three-year low. A combination of rising interest rates and low home affordability dented the housing market for much of 2018.

However, builder confidence rebounded as the index went up to 58 in January compared to the 56 reading in December. Furthermore, the central bank has been sounding increasingly dovish as of late, which could mean that less rate hikes than anticipated for 2019–something that could help give the sector a much-needed boost.

Rising in conjunction with mortgage rates have been home prices, putting prospective buyers out of reach. The latest data from the National Association of Realtors showed that the Quarterly Housing Affordability Index has been dropping thanks to a rise in median home prices.

However, it appears that prices are beginning to soften. Home prices in the month of November logged a 5.1 percent annual gain, which represents its smallest increase since August 2015.

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