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JAN. 27, 2015
Neil Irwin
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The same forces that led to a rising dollar in recent months have meant lower long-term interest rates across the economy, including for home buyers. The average rate on a 30-year fixed-rate mortgage started 2014 at around 4.5 percent before ending the year at about 3.9 percent.
This may be creating a tailwind for housing activity, which was steady in 2014 but showed few signs of accelerating.
On Tuesday, the Census Bureau said that new home sales rose 11.6 percent in December, with rising prices and upward revisions to previous months. Separately, the S.&P./Case-Shiller home price index showed that home prices rose 0.7 percent in 20 major cities in November, with price rises in every city.
Eight years after the housing boom started to turn to bust, the sector may not be booming, but with the help of lower mortgage rates it is contributing to economic growth even as the strong dollar and lower energy investment pull the American economy the other way.
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