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It might be a little stale, but data from S&P/Case-Shiller show home prices continue to stabilize across the nation. Specifically, Case-Shiller's August home price index shows no change. That said, the index points to a slight price contraction going forward. But this really isn't news; recent data from Clear Capital, Zillow, and other data aggregators already show some price weakness in September.

The pricing weakness is likely due in part to aggressive discounting by homebuilders trying to spur demand. The strategy appears to be working. Sales of new homes jumped 5.7 percent in September to an annual rate of 313,000 units. This rise in sales volume, in turn, pushed down supply to 6.2 months at the current sales rate –the lowest supply level in 18 months.

That's the good news. The bad news for homebuilders is that the median national home price is down 3.1 percent to $204,400, posting a third-consecutive monthly decline. What's more, year-over-year price contraction is 9.9 percent –the steepest yearly decline since the recession.

Some of the sting on new home prices is mitigated by the fact that most of the discounting occurred in the West and South: in other words, in the overbuilt regions in Florida, Arizona , and California . It is still possible these regions will continue to skew price data into 2012.

That said, we remain convinced that prices and sales in many parts of the nation will continue to claw forward. Our conviction is bolstered by news on gross domestic product, which improved to an annual growth rate of 2.5 percent in the third quarter. We were particularly encouraged to see more business investment lead by durable goods orders. We mentioned in a previous edition that business investment is just as important as consumer spending to sustained economic growth. The consumer recovered long ago, and now it appears the business investor is recovering as well.

We think this is good news for housing heading into 2012. More economic spending and investing will mean more jobs and less unemployment. Employment, more than anything, is what's needed to pull us out of our doldrums.

What does this encouraging news on GDP growth mean for mortgage rates? An improving economy will mean more demand for loanable funds and possibly rising consumer prices. Admittedly, the economy has improved slower than most (including us) believed it would. But recent events in Europe suggest the Greek debt crisis won't destroy Europe 's banks and the surge in stock market activity points to more risk taking and more economic activity down the road.

In short, the market is leaning toward higher mortgage rates. Next week's data on employment will be key to getting a better idea on where rates are headed.

Courtesy of 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.

One of our recurring themes over the past year has been that the laws of supply and demand are infallible: lower prices drive demand, which, in turn, lower supply and help prices recover.

The process is working before our eyes. REMAX reports that home sales prices are down 3.3 percent from a year ago (though prices have risen in recent months), and at the same time national home sales and median prices are up.

You can most clearly see this law of supply and demand at work in the hardest hit home markets. REMAX data shows that Florida has seen significant reductions in inventories as well as rising median list prices. In fact, Miami had the largest inventory reduction year-over-year at 49.3 percent, while the median list price in Fort Myers-Cape Coral, Fla. , was up 34.4 percent – the highest increase in the nation.

Some other hard hit areas, Las Vegas most noticeably, are still searching for a bottom. We suspect, though, that these areas are close to finding one (housing will not be depressed forever). Our chief complaint is that this bottom-and-recover process would likely occur at a faster pace if we could get more mortgage funds to more creditworthy customers.

Courtesy of 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 a difference a month makes. In September, homebuilder mood was in the doldrums, where it has been for most of the year. In October, that mood turned noticeably positive, with the homebuilder index jumping four points to 18 – the highest posting in nearly 18 months.

There is still a long way to go before homebuilders approach the heady days of a few years ago, but at least the market is progressing. Builders began work on an annual rate of 658,000 houses in September, a 15-percent increase over August's starts and the most since April 2010. Much of the increased activity was centered on multifamily homes, which surged 51.3 percent. However, work on single-family homes also increased, 1.7 percent, to an annual rate of 425,000 units.

The National Association of Home Builders, which compiles data for the homebuilder index, warns that builders face pricing pressure from foreclosed properties. The good news is that foreclosures appear less onerous than they did a year ago. At the same time, homebuilders are adding to supply at a record low rate. In other words, the economics of home building are much more encouraging than they were earlier in the year.

The economics of the existing-home market continue to adhere to the recent past. Total inventory declined 2 percent to 3.48 million homes at the end of September, with the sales rate declining 3 percent to 4.91 million units. This came as no surprise; August's sales were exceptionally strong and a slight drop off in the sales pace was expected.

Homes that were purchased over the past two months have been financed with mortgage rates that were prevalent during the youth of the purchaser's parents. In the past couple weeks, though, rates have been trending higher and are up around a quarter percentage point from where they were a fortnight ago. That said, mortgage financing is still a very good deal.

But will mortgage financing become a better deal? Many in the industry think so. We are less sure, especially when factoring in growing price inflation. Overall producer prices are up nearly 7 percent this year, while the core rate, which excludes energy and food, is up 2.5 percent. On the consumer side, overall prices are up 3.9 percent, while core prices are up 2 percent.

The Federal Reserve is trying to hold mortgage rates low by buying longer-term Treasury and mortgage-agency debt. Problem is, the market has been pushing back in recent weeks, as evinced by the spike in 10-year U.S. Treasury note yields. Bottom line, the falling mortgage-rate trend is much less a sure thing than it was a month ago.

Courtesy of 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.

Mortgage Market Debate It's no secret that a lot of mortgage lending is in government-backed loans. Nationally, Fannie Mae, Freddie Mac, and the FHA back nine in 10 new mortgages. The federal government is looking to pull back and see if more private investors and lenders can be lured into the market.

There are legitimate concerns with a prospective federal pull back. There is the possibility of reduced available credit, thus leading to fewer sales and lower home prices. We've already seen some reduction in volume in higher priced homes when limits on loans backed by Fannie and Freddie declined at the beginning of October.

There is also the concern that sellers will find that fewer potential buyers qualify to purchase their properties. Less liberal down payments and lower loan limits could also hamstring trade-up buyers who want to tap their home equity as a down payment for their new residence.

Here's the conundrum: If we went to return to a more market-driven lending environment, we have to attract private investment, which means rates would have to rise. Private lenders and investors require a greater return than public sources of funds. It's worth noting, though, that many private lenders are flush with money they could put to work. What's more, private lenders and investors will add diversity to the market, which it is currently lacking.

The point is, we can see the mortgage market changing. We can't say whether it will be a net positive in the short term, but we think it raises the uncertainly level enough for borrowers to seriously consider taking advantage of the mortgage market as it is today.

Courtesy of 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.

We've reported frequently on the encouraging data on home prices. The most recent encouraging data comes courtesy of Zillow, which shows that home prices inched 0.1 percent higher in August, with the average home price moving to $172,600. Zillow's data also show that the national foreclosure rate dropped to 9.2 homes out of every 10,000 homes, down from 10.9 homes out of every 10,000 in 2010.

Unfortunately, the good vibes on pricing and foreclosures were tempered by a warning that foreclosures will accelerate once the controversial robo-signing imbroglio passes. In fact, Zillow believes foreclosure inventory will pressure home prices and that prices won't bottom until 2012 “at the earliest.”It's possible we could see national average and median home prices fall. Locally, prices could just as easily fall, stagnate, or rise. In fact, a rise might be more in the offing for many local markets. After all, national data is skewed by a few regions – Nevada , Arizona , Central Florida and Central California . Overall, we still see prices firming and rising in many markets, though that trend might not be reflected in national numbers.

As for mortgage rates, we can say categorically that they have been rising nationally and locally since last Friday, thanks in part to an employment report that showed the economy created more jobs in September than most economists had expected. In many markets, rates were up 20 basis points on the 30-year fixed-rate loan. This shouldn't come as a surprise; the yield on the 10-year US Treasury note – the foundation for long-term mortgages – has risen 35 basis-points over the past 10 days.

To be sure, mortgage rates could reverse course and return to the long-term down trend, but there is a real danger to a strategy predicated on returning to the long-term trend in a market that has been trending higher; that is the obvious: the short-term trend might not reverse.

Another danger is supply and demand. Falling mortgage rates do stimulate demand, but if supply isn't rising at an accommodating pace, there is no guarantee that an ultra-low mortgage rate will be filled. Loans, like all good and services, are rationed by price. If you can get a higher price for your product, you get it.In short, if someone is satisfied with his rate, the best strategy is to ignore the daily vicissitudes and lock. Regret is a tough emotion to overcome, particularly in a market that is showing signs of wanting to move higher.

Courtesy of 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.