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Housing in California is a tale of two markets, with the median home price expected to increase while home sales projected to fall. The median price in California will increase 3.3% in 2010 from this year’s level, but home sales will dip 2.3%, the Los Angeles-based California Association of Realtors (CAR) said in the group’s 2010 California Housing Market Forecast. The median home price in the state will increase to US$280,000 next year, up from 271,000 this year. Home sales, however, will drop to 527,500 units in 2010, down from a projected 540,000 units this year, according to the forecast. Read more

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Home sales and orders for durable goods are likely to have risen in August, extending gains that have signaled the US is emerging from the worst recession since the 1930s, economists said before reports this week. Purchases of new and existing houses climbed to a combined 5.79M annual pace last month, the most in almost two years. Bookings for durable goods likely rose 0.4%, the fourth advance in five months. Housing and manufacturing, two areas that deepened the slump, are stabilizing as stimulus measures such as credits to first-time home buyers and “cash for clunkers” revive demand. While acknowledging the economy is healing, analysts project Ben Bernanke and his colleagues at the Federal Reserve will commit to keeping interest rates low when they meet this week. Read more

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Fixed mortgage rates in the USA fell to a record low for the second consecutive week, signaling that Federal Reserve Chairman Ben Bernanke’s effort to spur the housing market is gaining traction. The 30-year rate dropped to 4.78% from 4.85% a week prior, the lowest since records began in 1971, Freddie Mac said today in a statement. Rates are falling to historic lows as the Federal Reserve ramps up purchases of mortgage-backed bonds to support home lending. Mortgage applications in the U.S. rose for a fourth consecutive week as a decline in borrowing costs prompted more refinancing. “Lower rates will help increase demand for homes,” said Celia Chen senior director at Moody’s Economy.com in West Chester, Pennsylvania. “We need to see stronger demand for homes to help end the housing correction.” The Fed’s efforts to expand lending “should make new consumer, business, and mortgage loans more available, at lower cost,” Bernanke said in a March 20 speech to a Phoenix banking conference.

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