"The ache for home lives in all of us." Maya Angelou. A strengthening labor market and low home loan rates helped the housing sector end 2015 on a strong note.
Sales of new homes rose 10.8 percent in December from November, which was the third consecutive monthly gain and the third best annual gain since 2008. For all of 2015, sales of new homes rose 14.5 percent.
Home prices also rose 5.8 percent in November 2015 when compared to November 2014, according to the S&P/Case-Shiller Home Price Index. Prices were up 0.9 percent in November from October, which was the fastest monthly gain since March. Fourteen cities had better gains in November than they did in October.
However, the economy overall did not perform as well at the end of last year, as noted by the Gross Domestic Product (GDP) reading for the fourth quarter. The 0.7 percent registered was a major disappointment, bringing 2015's annual GDP to 2.4 percent. The Fed also pointed to slowing economic growth in its first Federal Open Market Committee meeting for 2016, where they left their benchmark rate unchanged, as expected.
While the economy does need to improve, one upside of the disappointing GDP report is that it boosted Mortgage Bonds, which have surged higher throughout January. This has helped home loan rates, which are tied to Mortgage Bonds, remain near historic lows.
