The Consumer Confidence index, as reported by the US Government, was up 4.3% to 113.7, the most optimistic in years. Existing home sales rose .07% nationally to 5.61 million units sold through December 21. Santa Barbara sales however were down 2% in 2016 from the year before primarily because there has been a chronic shortage of inventory. This caused the Median sales price to go up 4.5% from $1,100,000 in 2015 to $1,149,000 in 2016.

The average interest rate for a 30 a year mortgage went up to 3.77% from 3.47% with Frddie Mac reporting another rise last week to 4.16%. Buyers are motivated to buy now before interest rates go up further. Rising rates with diminishing inventory moved the market bias to sellers as prices rise along with interest rates.

In conclusion if the economy continues to grow and creates more jobs with higher wages, rising interest rates closer to historical norms would benefit buyers, sellers and savers who could now become future buyers.