Real Estate Information Archive

A Mixed Market at Best

Though still positive, home builder sentiment has plateaued in recent months. This was a point we noted last week when the NAHB’s sentiment index was released. We’re not surprised that sentiment has plateaued, given that starts have plateaued.

Now, it appears that new-home sales have also plateaued. March sales posted at 511,000 units on an annualized rate, which is on the low-end of most expectations. The consensus estimate among economists was for sales to post at 525,000 units.

Somewhat surprisingly, pricing still hasn’t gained traction. Discounting is prevalent. The median price of a new home dropped 3.2% in March to a median $288,000, Year over year, the median price of a new home is down 1.8%.

The median price is a national number, which may or may not apply to the local market. We’re finding that pricing remains tight in lower-end homes. The discounting appears to be occurring mostly in the upper echelons. Many potential first-time buyers, particularly younger first-time buyers, are still having a rough go of it if a new home is their preferred choice.

That said, the new-home market is approaching equilibrium. Sales relative to supply has improved to 5.8 months. Supply at six months relative to sales is considered the norm.

The good news is that existing-home sales are gaining traction. Sales rose 5.1% to 5.33 million units on annualized rate in March. The sales spike wasn’t entirely unexpected. February was a sour month, with sales down 7.3%.  Even with a lousy February, existing-home sales for the quarter were up a respectable 4.8%. Better yet, single-family homes led the charge, with sales up 5.5% last month. 

As for pricing, the median price of an existing home rose 5% to $222,700. Of course, this, too, is a national number.  Western markets, led by San Francisco, Denver, Portland, and Seattle, continue to show the strongest price gains. We haven’t seen all the data, but we suspect that much of the price appreciation is concentrated in the lower end of the market, which can be high. The lower end of the market in many West Coast states is priced like the higher end of the market in other markets across the country.

That said, there’s good reason to remain upbeat as we head into the summer months. The market today has a Goldilocks feel about it: not too cold, not too hot, just about right.  That’s how a healthy market should feel.  Exuberance is nice in small doses; depression is always lousy, regardless if the dose is large or small. We prefer an even keel over the extremes. This is what we have today.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

Getting to the heart of a complicated financial matter in a few paragraphs is no easy feat, but we’ll try. After all, interest rates are an important variable in housing and lending.  It’s a good idea to understand how the Federal exerts its influence on our lending rates.

The Fed has been a central and pivotal figure since the 2008 financial crisis. It has moved to lower interest rates to levels rarely seen.

The usual way to lower rates is to simply move the range on the federal funds rate – a key overnight lending rate for commercial banks. The Fed influences the fed funds rate by adjusting the interest rate it pays banks on the reserves banks hold at the Fed.

Today, the Fed pays 50 basis points on these reserves, which was raised from 25 basis points in December. The fed funds rate, in turn, adjusts to reflect the rate the Fed pays on bank reserves.  No bank will lend for less than the Fed pays on reserves, so the fed funds rate adjusts to what the Fed pays on bank reserves.  Other lending rates adjust to the fed funds rate over time.

Buying and selling securities are other means to influence interest rates.

When the Fed buys a mortgage-backed security or a Treasury security, it pays with newly created money.  The Fed buys these securities from banks and primary dealers. The money is credited to the seller’s account at the Fed. This creates liquidity – more money to lend.  At the same time, the Fed’s demand for these securities raises their price and lowers their yield. Interest rates tend to fall.  The opposite occurs when the Fed sells securities; rates rise. Other interest rates take their lead from what is paid on these low-risk securities.

Mortgage rates tend to take their immediate lead from long-term Treasury securities, particularly the 10-year U.S. Treasury note.  The 30-year fixed-rate mortgage is typically quoted around two percentage points higher than the yield on the 10-year note. This is why we frequently refer to trends in the yield on the 10-year note to get an idea of where mortgage rates are heading.

So, if you want to get an idea of where mortgage rates are heading, keep an eye on the 10-year U.S. Treasury note yield (found readily at Yahoo Finance) and the effective federal funds rate (found at Bloomberg). Both will give you an idea of what to anticipate in our lending market.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

Speculation runs rampant: Will the Federal Reserve raise the federal funds rate or not next month? We remain in the “not” category, and to see how our opinion jibes with other opinions, we'll occasionally turn to CME Group's website (cmegroup.com). CME follows the federal funds futures market, where speculators bet on future interest rates, and CME's data show speculators are betting only a 24% chance for a rate increase next month.

That said, professional speculators can be a schizophrenic lot.  It's not unusual for CME to report wild weekly swings in the percentage speculators are giving the Fed.  Who knows? Next week these same speculators might price in a 50% chance.

The Fed may or may not raise the fed funds rate, which may or may not impact long-term lending rates.  The fed funds rate is a very short-term rate. It's the rate commercial banks lend to each other overnight. Given that most banks have an ample supply of excessive reserves held at the Fed, there isn't much demand for these loans.  The current fed funds rate is only 14 basis points.  In other words, a Fed rate hike wouldn't necessarily work its way to the long-end of the lending curve. 

Our instincts –  and this is all anyone can really go on – suggests that today's low rates will hold for a while longer.  Come early September, though, we wouldn't be surprised to see rates creep higher due to rising speculator anticipation. Therefore, now is as good a time as any to act.  We still think that the long-term impetus is for rates to rise.  

 Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

Housing: The New Store of Value

It's been a rough August for stocks. Investors have had to endure a 10% drop in the major stock-market barometers: the Dow 30, the S&P 500, and the NASDAQ Composite Index. We wouldn't be surprised to see further declines in weeks to come, given the precarious state of the Chinese stock market and China's economy.

But as they say, when your house burns down mine looks a lot better. Housing as an asset class looks good compared to stocks. At the least, housing has momentum on its side.

Housing demand continues to trend higher. Existing-home sales posted a solid 2% gain in July, with sales hitting 5.59 million units on an annualized rate. Sales were strong despite a dearth of inventory, which stands at 4.8-month’s supply at current sales.  Year over year, supply is down nearly a full month. When supply is down and demand is up, prices are usually up as well. The median price for an existing home rose 5.6% to $234,000 in July. 

New-home sales were also up last month, which is no surprised, considering the strong uptrend in housing starts in recent months.  Sales of new homes posted at 507,000 units, a 5.4% increase over June.  Here, too, inventory remains tight, with supply dropping to 5.2 months at the current sales rate.  Again, we see the same dynamic: tight supply plus rising demand equals rising prices.  The median price of a new home rose 3% to $285,900. 

Interestingly, there appears to be a price dichotomy at work. The S&P/Case-Shiller 20-city index dropped 0.1% in June. Eleven of the 20 cities Case-Shiller follows posted declines. Year over year, the Case-Shiller index is up 5%, but price-appreciation has eased in recent months, with the index now up 5% year over year. This isn't a bad thing. After all, low-to-mid-single-digit appreciation is the historical norm.

Of course, coverage is the reason for the difference in existing-home and new-home prices reported by Realtor.com and the Commerce Department and prices reported by Case-Shiller.  The former two cover most of the country; the latter covers only a few choice metropolitan areas.  As we all know, all real estate markets are local markets. Any aggregate number can be meaningless to any local market. That said, overall, things look healthy, and that means many local markets are healthy as well.  

Given the current state of the stock market, we expect most local markets to remain healthy.  Housing is looking good as both an investment (flipping or rental) and as an appreciating long-term asset (an owner-occupied home).  A sub-4% rate on the 30-year fixed-rate mortgage will further inspire demand. Given housing's comparative advantage to stocks, we see no reason the good times shouldn't last quite a bit longer.    

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

Jobs Report Puts Rate Hike on Hold

It looks like September is off the table. Last week, Federal Reserve Governor Jerome Powell speculated that September might bring the first increase in the federal funds rate since 2006. That appears unlikely. Indeed, most Wall Street traders point to December as the “new” earliest date for a rate increase.

Though only one month's worth of data, the June employment report is a contributing factor to the push back. On the surface, everything appears sound. The economy created another 223,000 jobs. It's always good news when the economy creates 200,000+ new jobs a month. It's also good news when the unemployment rate falls, as it did last month. The unemployment rate dropped to 5.3% from 5.4%.

When you did a little deeper, though, you find the news is somewhat less cheery. Average hourly earnings continue to stagnate. For the month, the average rate was $24.95, the same as in May. Year over year, wages are up 2%. This is on par with annual wage growth since the recession ended five years ago. During a recovery, wages usually grow at a much strong rate.

As for the unemployment rate, it's somewhat misleading. Fewer people are in the workforce. The participation rate – the share of working-age people wanting to work – decreased to 62.6% in June, the lowest since October 1977. To be sure, aging baby boomers are leaving the workforce, but there is also a swell of working-age people who've left the workforce out of frustration.

When you take a lackluster jobs report and add to it the events in Greece, December becomes the odds-on choice for a fed funds rate increase. (We still think 2016 is more likely.) That said, the fed funds rate mostly influences short-term rates. Credit-market participants have taken over long-term rates, and they are on the rise.

With everything going on with Greece (namely Greece's inability to meet its debt obligations and its possible expulsion from the European Union), U.S. Treasury rates would normally fall. Investors faced with heightened uncertainty usually pour into U.S. Treasury debt. That hasn't been the case this go-around. The yield on the 10-year Treasury note continues to hold near 2.4%. Because the 10-year note influences mortgage rates, the 30- and 15-year fixed-rate loans continue to hold near 2015 highs.

Fortunately, higher long-term lending rates haven't taking any steam out of housing. Momentum remains strong. The Pending Home Sales Index was up 0.9% for May, which beat most estimates. The latest increase pushes the index up to 112.6, the highest it's been since 2006.

The prospect of even more home sales in the face of higher lending rate is testament to the underlying strength in housing. We expect strength to be maintained into early autumn, and likely beyond.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com

Home Sales Defy Conventional Wisdom

Homes sales and mortgage rates are supposed to be negatively correlated: when one is up, the other is down.

That's not always true. The connection between home sales and mortgage rates has frequently been tenuous. Yes, there are times – like a few years ago – when falling rates spur sales activity. At other times, such as the late 1970s, homes continued to sell despite soaring mortgage rates. Many variables in addition to mortgage rates coalesce to form a home-sales trend.

There is no denying that mortgage rates have trended higher over the past three months.Rates were flat over the past week, but they continue to hold near 2015 highs. Despite rates holding near highs, purchase mortgage activity moved higher. Purchase mortgage applications were up another 1% last week. This pushes the year-over-year gain to 18%.

The trend in purchase applications is particularly welcomed news, and not just for selfish reasons. Recent data point to a more-normalized market, with mortgage-financed purchases supplanting all-cash purchases. This means owner-occupied buyers are becoming more prevalent. We've noted frequently that a normalized housing market is marked by a high percentage of buyers who occupy their properties. A normalized market is also a sustainable market.

As for sales themselves, existing home sales jumped 5.1% to a 5.35-million annual rate in May. The year-over-year gain is encouraging, with sales up 9.2%. We haven't seen this run rate of sales in nearly a decade.

Existing home sales are moving higher despite the headwinds of continually rising prices. The median price for an existing home rose to $228.700, and is up 7.9% year over year. The good news is that rising prices are bringing more inventory to market. Homes for sale increased 3.2% to 2.29 million last month.

Though not quite setting a new multi-year high, new home sale s continue to progress as well. Sales were up 2.2% to an annualized rate of 546,000 in May. This is on top of a 27,000 upward revision in April. Sales gains appear to be motivated by some discounting, though. The median price of new home posted at $282,800, which is 1% lower than a year ago. New-home prices will likely pick up in coming months, given that inventory remains thin at 206,000 units.

To be sure, the correlation between mortgage rates and home sales can be tenuous. But if rates rise a enough, they can retard sales growth. Many market participants are focused on the Federal Reserve. The focus sharpened this past week after Federal Reserve Governor Jerome Powel l said that he sees the Fed raising the federal funds rates this September. What's more, this increase could be supplemented by an additional increase in December.

We've been in the minority opinion on the Fed and interest rates. Given recent economic growth, we are still unconvinced a Fed rate increase is in the cards. But if we are wrong, we think we will be OK. Recent moves in long-rates likely reflect a Fed rate hike. What's more, when the Fed moves to raise rates, the impact will be felt mostly on the short end of the yield curve, with short-term variable rates rising and longer-term rates holding near current levels.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

Recent housing data also give the Federal Reserve reason to pause on raising interest rates.

The trend in negative equity appears to have turned and is on the rise. CoreLogic reports that negative equity increased to 10.8% of all mortgaged properties in the fourth quarter of 2014. In the third quarter, the percentage was 10.4%. Roughly 200,000 more homeowners find themselves in a negative-equity position.

Home builders are also growing more cautious. The NAHB sentiment index dropped two points to a 53 reading, an eight-month low. The traffic component of the index showed particular weakness, falling two points to 37, a nine-month low.

Lower builder optimism is reflected in fewer starts. Housing starts dropped to 897,000 annualized units in February. This is 17% below the revised January estimate of 1.081 million units and is 3.3% below the February 2014 rate of 928,000 units. Single-family housing starts were particularly disappointing, falling 14.9% to 593,000 annualized units.

Of course, one month doesn't make a trend and the national numbers can be meaningless to any local market. That said, the Federal Reserve does pay attention to national numbers. If housing slips into a funk on the national stage, you can be sure the word “patient” will reappear in Fed meeting minutes.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

What the Latest Fed Statement Means to Us

Housing and mortgage markets are supposed to be the focus, but a lot of time is spent vetting the Federal Reserve. We have no choice. The Fed is the guiding light of all financial markets these days.

Look no further than Fed Chair Janet Yellen's comments on Wednesday. For most of the day, financial-market participants were on the edge of their seats, anticipating somewhat anxiously how she would guide: Is an interest rate hike imminent or not?

We mentioned last week the importance of the word “patient.” The Fed had used that word as a way of telegraphing that no rate increase was imminent. In the latest meeting minutes, “patient” was removed, but no need to fear. The lack of “patient” does not imply impatience.

Despite strong monthly job growth over the past year, the Fed is still unsatisfied with economic growth. In fact, the Fed lowered its 2015 and 2016 outlook for gross domestic product (GDP) growth. At the same time, inflation remains muted. In other words, the Fed has the leeway to remain patient when it comes to raising interest rates.

Markets were somewhat impatient in their reaction to the good news. The major stock market measures spiked higher. Conversely, bond yields spiked lower. The yield on the 10-year U.S. Treasury note fell 10 basis points. The 10-year note now yields less than 2%.

As the yield on the 10-year note goes, so goes mortgage rates. Rates on both the 30-year and 15-year loans were significantly lower on Wednesday (though on Thursday they began to drift higher).

Now the question is, should we expect these lower rates to hold?

If you talk to mortgage-rate watchers, most still anticipate the Fed to raise the federal funds rate this year, possibly as soon as June. We are somewhat more circumspect. We would not be surprised to see a rate hike postponed until 2016. We say that because the U.S. dollar remains strong on the world market. An interest rate increase would make the dollar even stronger. (A strong dollar is a mixed blessing: imports are cheaper, but some exports are more expensive.)

Easy money everywhere also mitigates the odds of a rate increase. More than 20 central banks have implemented easy money policies since December. If the Fed moves to tighten its monetary policy – which an interest-rate hike would do – that ensures an even stronger dollar.

In short, there is no overwhelming reason for the Fed to begin raising interest rates. This tells us that sub-4% on the 30-year fixed-rated loan will be with us for a while.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

Will They or Won't They?

Another month and another strong jobs report.  

Payrolls increased by an impressive 295,000 in February. This follows a healthy 239,000 gain in January and an eye-popping 329,000 surge in December. Continued strong job growth has dropped the official unemployment rate down to 5.5%.  

Way back in early 2014, we opined that 200,000-or-more new jobs per month would be a sign the economy was in full-growth mode. That's been the case. If we go back to January 2014, we see that there has been only one month of sub-200,000 monthly job growth. Business activity has certainly picked up over the past 15 months. (This is key. It's not so much job growth that matters, but business activity that creates value that requires workers to produce.)

With the latest employment report, more economists are talking interest rate hikes. History has shown that when job growth is strong and the unemployment rate is below 6%, odds rise that interest rates will rise. Everyone now is looking to June for the first Federal Reserve federal funds rate hike in eight years. Since December 2008, the Fed's target fed funds rate has been held at zero.

The fed funds rate is a short-term rate. It's the rate banks lend to each other overnight. It does influence longer-term rates, though. In short, the fed funds rate can be viewed as the base rate that determines the level of all other interest rates.

All eyes will be on the Fed FOMC meeting announcement this coming Wednesday. Specifically, market watchers will focus on one word – “patient.” The Fed has leaned on this word over the past six months to divert attention from a fed funds rate increase. Many pundits and commentators believe if “patient” is no longer in the press release, the Fed will raise the fed funds rate in June.

So does this mean mortgage rates are on the rise?

Mortgage rates have been rising since early February. They actually spiked higher on the February jobs report, but they've since drifted lower, and are actually slightly lower than they were this time last week. This isn't all that unusual. There's an old saying in financial circles: “Buy the rumor, sell the news.” This suggests many people were expecting a strong February jobs report, and when they got it, rates moved lower.

Despite another strong jobs report and unemployment at 5.5%, we still don't believe the Fed raising rates in June is a sure thing. There is a chance rates could remain low for longer than many people think.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

The Jobs Continue to Roll In

Last week we asked – somewhat rhetorically – whether the recovery was really on. If you were to focus on job growth, you'd be hard pressed not to answer “yes.”

Once again, rising economic activity produced another 200,000-plus month of new jobs. Specifically, 257,000 new jobs were created in January. At the same time, the unemployment rate inched up to 5.7%. This might seem a paradox – more jobs and a higher unemployment rate – but it isn't. When job creation ramps up, more people enter (or re-enter) the job market.

More good news was found on the wage front. Wage growth has stagnated in recent years, but is moving higher. The average hourly rate bumped up $0.12 to $24.75 in January. More people working and more people earning more is obviously a good thing.

The job numbers were better than most analysts and economists expected. The unexpected nearly always moves markets. Unexpected job growth resonated throughout credit markets. Over the past week, the yield on the 10-year U.S. Treasury note moved nearly 10-basis-points higher. Because the 10-year note serves as a base rate for the 30-year fixed-rate mortgage, we were unsurprised the rate on this benchmark mortgage loan also moved 10-basis-points higher.

Mortgage rates are higher, but they're still very reasonable. The 30-year loan remains firmly ensconced below 4%, while the 15%-year loan remains firmly ensconced below 3.25%. We say rates are reasonable because the downward trend in oil prices appears to have ended. Oil prices are moving higher. Rising oil prices could lead to more consumer-price inflation down the road. Rising consumer-price inflation could pressure interest rates to move higher.

The overall rate of home-price appreciation is becoming more reasonable (by historical standards). FNC's Residential Price Index was up 5% year over year in December. Trulia's data show that asking prices for homes rose 0.5% in January, or 7.5% year over year.

Prices continue to rise, but at a rate more aligned to historical norms. Normalcy is what market participants want. No one wants a market running too hot or too cold. The closer we get to that Goldilocks equilibrium, the more vibrant and sustainable the market becomes.

We've mentioned frequently the inability for existing-home sales to sustain growth. We think 2015 could finally be the breakout year. Normalized price-appreciation is a factor, but so is the trend in national home rents. Trulia reports rents were up 6.5% year over year in January. The rental market remains tight. A tight rental market makes owning a more viable and desirable alternative to renting.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.​