Well if the stock market is any indication, one would guess that we are heading in the right direction. It is trending higher and with that generally goes the housing market. For this year mortgage rates are expected to remain lower, further fueling buyer interest.

Rates are expected to stay in high 3s to very low 4s. This is great news for buyers as it comes down to affordability. Low rates equates to low monthly payments.

FHA loans however are expected to get more expensive with some added cost for borrowers such as increased MI. Refinancing will slow as many of the refinance candidates have already locked in these historically low rates.

Foreclosures will also continue to fall as lenders favor short sales and will promote this option to their struggling borrowers.

Housing starts are rising and the stocks of the big builders are already reflecting the anticipated returns from those companies with Lennar and DR Horton posting some nice upward movement in their stock prices.

Northern California will continue to be strong as there are many investors and first time home buyers in the market and more will show up with check books in hand for the spring market. Additionally, job growth in the region is also moving up nicely. San Ramon and Danville office space vacancies are down which generally equates to stronger employment and hiring.

All of this is good news for the housing market and is shaping the new normal.