Home prices are still declining. Does this mean you should wait before buying? Mortgage rates dipped but will it last? The National Association of Realtors reported on Existing Home Sales this week. Will home sales continue to outperform weak expectations? Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free Case-Shiller: Home Price Go Lower Standard & Poor’s Case-Shiller Home Price Index was released this week. The verdict? Home prices continue to drop. In the 4th quarter, prices dropped year-over-year 4.1% for the 20 City Composite Index. This is the steepest decline in home prices since the 4th quarter of 2009. Of the 20 cities in the index, only 2 posted home price gains; San Diego and DC. New home price lows were seen in Atlanta, Charlotte, Portland, and Seattle. Las Vegas and Cleveland home prices are now officially below year 2000 levels. With no end in sight to home price declines one should consider the severity of the declines in their local market. Will home price declines cause more peop le to default? Remember the Case-Shiller Index lags close to 60 days. Also last week we reported on the early stage delinquencies declining. I expect we’ll see prices stabilizing in more markets by the end of the first quarter. Mortgage Rates Slide Mixed reports on inflation and instability in the Middle East caused a decline in mortgage rates this week. Freddie Mac reported that the 30-year fixed rate declined from 5.00% to 4.95%. The 15-year fixed rate dropped to 4.22% from 4.27%. Rates are slightly below where they were a year ago when the 30-year fixed averaged 5.05% and the 15-year fixed averaged 4.40%. Inflation gave the markets mixed signals this week as core prices increased. Home prices declined. Excluding home prices, inflation is concerning the markets. Interest rates dipped slightly though as unrest in Middle East spooked investors. Continued volatility seems to be the only thing we can really count on. Existing Home Sales Rise for 3rd Straight Month The National Association of Realtors reported sales of existing homes rose for the 3rd straight month in January. Sales of existing homes rose 2.7% in January to a seasonally adjusted annual pace of 5.36 million homes. Existing homes sales were up 5.3% over January 2010. The inventory of homes on the market stands at a 7.6 month supply. Sales of existing homes are showing an improvement over last year. More importantly the inventory of homes on the market continues to drop. The shadow inventory isn’t translating into an avalanche of actual inventory as many have predicted. Important to note; cash sales were 32% of the market in January and investors now make up 23% of the market. Final Thoughts News continues to be mixed on the housing market this week. Housing prices continue to decline on a national level but inventories are working their way down. Also a slight dip in interest rates is spurring more refinance activity. I expect these mixed signals to continue. I’m still hearing of investors waiting for home prices to decline further. My feeling here is that it’s getting harder to argue that we aren’t at or near the bottom of the housing market. The smart money is in the market now. NAR reporting that 32% of transactions are cash seems commensurate with what I’m seeing as well. I think it’s safe to say, “Follow the money”.