No matter what the future holds for housing, no one can dispute the fact that the past few years have been great times to own a home.

A new study by First American Real Estate Solutions shows that in the past year home values in metropolitan areas have increased an average of 7 percent nationwide. Denver, Minneapolis, Boston, Chicago and several California communities all have shown gains above 10 percent.

Even in areas where values have sagged somewhat in the past year - such as New York and Orange County, California - it is only after a decade worth of increases that already had moved values up by as much as 25 percent.

According to First American, most of the 35 metropolitan areas included in the study have seen gains of between 4 to 8 percent, with the average increase coming in around 7 percent.

U.S. home values are now, on average, almost 29 percent higher than in 1990, the study said.

Interest rates matter less in home buying

At this point its becoming hard to tell what would turn around America's housing market. In the past year the Federal Reserve has raised interest rates three times, yet it still appear more than 5.25 million homes will change hands this year, a record number of transactions, and almost all economists are saying 2000 could also be a very strong year.

In the past, the economic rule-of-thumb was that every rise in interest rates would eliminate roughly 750,000 potential homeowners from the market because they no longer would qualify for mortgages.

Now, however, the National Association of REALTORS® economic researchers are beginning to doubt the power of interest rates to curtail housing.

Researchers point out that mortgage companies are so competitive and Fannie Mae and Freddie Mac have become so innovative in their underwriting, that almost any American with a steady job should be able to qualify for a home.

Some researchers are beginning to feel that what's really behind the current decline in sales is that most housing needs have been met over the past two to three years.

Now easier for immigrants to get homes sooner

Immigrants who have two years of residence and a solid work history will be able to achieve ownership more quickly than immigrants in the past through a new initiative being offered by Bank One Mortgage in cooperation with Fannie Mae.

The $100 million program has five key features:

Published: November 30, 1999

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