Mortgage Market Guide Update

Home prices continued to rise in the period from December 2012 to December 2013, but at a lesser pace than previous year-over-year readings. CoreLogic reported today that home prices, including distressed sales, rose by 11% in the period mentioned, but that is down from the 11.8% gain seen from November 2012 to November 2013. In addition, prices declined month-to-month by 0.1% from November to December.

Richmond Virginia Fed President Jeffrey Lacker reported today that U.S. growth could be muted in 2014, but the Federal Reserve will continue to taper its massive stimulus program, dubbed Quantitative Easing III. Mr.Lacker cited declining spending by both consumers and businesses. The Fed official went on to say he feels the growth will be closer to 2% in 2014, about the same rate that the country has seen since the end of the Great Recession.

Stock prices are rebounding today after yesterday’s steep plunge, which was touched off by a weaker than expected reading from a national manufacturing report, the ISM Index. The S&P 500 had recently lost nearly 6% from its record closing highs hit in late December and mid-January. The declines have come from profit taking, Fed tapering, a slowdown in China and on the notion that a small correction was due after the record levels recently hit.