Builder Sentiment Holds Steady, Home Values On The Rise:- Home prices are continuing their climb, this information from the latest S&P/Case-Shiller 20-city home price report. According to the study, there was a year-over-year price bump of 5.8% last November, the most recent data available. In addition,the price increase for October was at 5.5% compared to the same period last year. Nationwide, home values have almost recovered from the 2006 high, a recovery of 10 years. In the 20-city report, four metropolitan areas hit record highs including Portland, San Francisco, Denver and Dallas. The problem appears to be a lack of inventory that is pushing prices up but homebuilders may not be as excited as they once were to build new homes.

According to another study by the National Association of Homebuilders, homebuilder sentiment, and indication of positive or negative views of the foreseeable future, stands at 60. Anything above 50 is a positive outlook and anything below is considered negative. While 60 does portend a positive new home economy it’s down from a 65 reading just last fall.

When you combine the push in home prices to the potential lack of enthusiasm among builders, it’s easy to see that real estate values should continue their climb. Especially so since financing costs are still very close to historic lows. According to Freddie Mac’s most recent mortgage rate survey, the 30 year fixed rate for a primary residential home drifted lower to 3.81%, the lowest since last October and in spite of the Fed rate bump last month.

For real estate investors, it appears there will be more good news in the year ahead as prices for existing homes should continue to improve and new home inventory might very well fall short of demand and it’s all but a foregone conclusion the Fed will hold off on any additional rate increases at least until the summer.