Highest Year-Over-Year Increase In Home Prices Since 2005

Two major indicators of home price trends showed a slowing momentum for home prices in December. The S&P Case Shiller 10 and 20 city indices reported that of 20 cities tracked, home prices were lower in December than for November.

Case-Shiller’s seasonally adjusted month-to month reading showed that home prices rose by 0.8 percent as compared to 0.90 percent in November.

David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said that “Gains are slowing from month-to-month and the strongest part of home price recovery may be over.” He also noted that seasonally adjusted data was showing a loss of momentum for home prices.

December home prices posted a year-over-year gain of 13.40 percent, down from November’s year-over-year reading of 13.70 percent. December’s reading reflected the highest year-over-year increase in home prices since 2005.

Analysts note that a slower pace of increasing home prices may allow more buyers to enter the market, and may also encourage more buyers to list their properties for sale.

This would increase inventories of available homes and relieve pent-up demand for homes. Although home price growth is cooling off, average home prices remain 20 percent below their pre-recession peak in 2006.

Home Prices Face Challenges In 2014

Another factor in slower growth of home prices is regional differences in the rate of economic recovery. Cities including Dallas, Texas and Denver, Colorado recently set records for escalating home prices.

Five states including Florida and Michigan accounted for almost half of foreclosures completed during 2013. Slow job growth and poor winter weather were also blamed for slower gains in home prices.

New mortgage rules and relatively strict mortgage lending standards may continue to dampen housing markets, but there is some good news as some lenders are easing credit standards.

 FHFA: Home Prices Higher For 10^th Consecutive Quarter

The Federal Housing Finance Administration reported similar trends in December home price data for properties either financed or owned by Fannie Mae or Freddie Mac. Home prices rose by a seasonally adjusted rate of 0.80 percent in December as compared to November’s reading.

Home prices were 7.70 percent higher for the fourth quarter of 2013 than for the same period in 2012. Adjusted for inflation, this reading indicates an approximate year-over-year increase of 7 percent.

FHFA reported higher readings for 38 states in its fourth quarter 2013 Home Price Index, as compared with 48 states in in the third quarter of 2013.  In order of home price appreciation, the top five states with highest growth in home prices were Nevada, California, Arizona, Oregon and Florida.

These calculations were seasonally adjusted and based on home purchases only.

What's Ahead For Mortgage Rates This Week - March 3, 2014

Last week's economic news was mixed, with new home sales increasing and weekly jobless claims higher than expected.

Case-Shiller and FHFA home price reports reflected slower growth in home prices. Mortgage rates moved higher for the third consecutive week.

Weakness in the jobs sector and harsh winter weather were seen as factors contributing to economic events, but sales of new homes jumped unexpectedly to their highest since 2008.

Case-Shiller, FHFA Report Slower Growth for Home Prices

The Case-Shiller composite home price index for December reported that home prices declined by 0.10 percent in December, which was the second consecutive monthly decline.

On a seasonally adjusted basis, home prices rose 0.80 percent in December as compared to November's reading of 0.90 percent. Year-over-year, home prices grew at a rate of 13.40 percent, their fastest pace since 2005.

The momentum of year-over-year home prices declined in December as compared to November's year-over-year reading of 13.70 percent. 11 of 20 cities included in the Case-Shiller composite index declined.

Analysts said that low inventories of available homes, higher mortgage rates and severe winter weather contributed to slower growth in home prices.

FHFA's quarterly House Price Index for the fourth quarter of 2013 posted its tenth consecutive gain in quarterly home prices. Seasonally adjusted home prices rose by 0.80 percent from November to December 2013.

FHFA, which oversees Fannie Mae and Freddie Mac, reported that home prices increased by 7.70 percent from the fourth quarter of 2012 to the same period in 2013. Adjusted for inflation, the agency reported a year-over-year increase of 7.0 percent.

FHFA House Price Index data is based on sales information for homes with mortgages held or securitized by Fannie Mae and Freddie Mac.

Fixed Mortgage Rates, New and Pending Home Sales Rise

Freddie Mac reported that average rates for fixed-rate mortgages rose last week, with the rate for a 30-year fixed rate mortgage rising 4 basis points to 4.37 percent.

The rate for a 15-year mortgage also increased by 4 basis points to 3.39 percent. The average rate for a 5/1 adjustable rate mortgage fell by 3 basis points to 3.05 percent. Discount points were unchanged at 0.7 0 percent for fixed rate mortgages and 0.50 percent for a 5/1 adjustable rate mortgage.

Weekly jobless claims also rose to 348,000 against projections for 335,000 new jobless claims. The four-week average for new jobless claims remained steady at 338,250.

The Department of Labor noted that weekly readings are more volatile than the four -week average reading. Poor winter weather and a softer labor market were cited as possible causes for the jump in new claims.

New home sales provided unexpected good news; they jumped by 9.60 percent in January, to a seasonally-adjusted annual rate of 468,000 sales against expected sales of 405,000.

December's reading was upwardly revised from 414,000 to 427,000 new homes sold.

January's reading was the largest increase in new home sales since July 2008, and there may be more positive housing news ahead as builders said that some of the sales lost during winter months may be recouped during spring.

Pending home sales increased by 0.10 percent in January to an index reading of 95 as compared to December's reading of 94.9, which was the lowest reading since November 2011.

What's Coming Up

This week's scheduled economic news includes construction spending, the Federal Reserve's beige book report, weekly jobless claims, and Freddie Mac's report on mortgage rates.

On Friday, the Bureau of Labor Statistics releases its Non-Farm Payrolls and National Unemployment reports for February.

Case Shiller Price Index Shows Homeowners A Rise In Home Equity

According to the S&P/Case-Shiller 10 and 20-City Home Price Indices released Tuesday, the U.S. Housing Market is on a roll based on year-over-year increases in average home values, but month-to-month results were mixed.

The 10 and 20-City Home Price Indices showed year-over-year growth of 13.80 and 13.70 percent respectively.

Highlights Include:

• Dallas, Texas posted its highest rate of annual growth since 2000.
• Chicago's average home price rose by 11.00 percent, its highest annual gain since December 1988.
• The 10 and 20-City Indices posted their best November home prices since 2005.

Top year-over-year gains in home prices included Las Vegas, Nevada at 27.30 percent, San Francisco, California at 23.20 percent, Los Angeles, California at 21.60 percent and San Diego, California at 18.70 percent. Atlanta, Georgia rounds out the top five cities with a year-over-year increase in home prices of 18.50 percent.

The annual readings for the S&P/Case-Shiller 10 and 20-City Housing Market Indices in November suggests that U.S. markets are strong enough to sustain momentum in spite of rising mortgage rates. The month-to-month results show that both indices decreased by an incremental 0.10 percent in November, 2013.

Keeping in mind the traditional slump in home sales during the winter and holiday season, lower month-to-month readings were neither unexpected nor disappointing.

Eight of the nine top cities posting the highest month-to-month growth in home prices were located in the Sun Belt. San Diego, California and Minneapolis, Minnesota home prices remained nearly flat after decreasing in October.

Nine of the 20 cities surveyed posted positive month-to-month growth in home prices. Of the nine cities, only Boston, Massachusetts and Cleveland, Ohio were not located in the Sun Belt.

S&P/ Dow Jones Index Committee Chairman Expects Slower Growth In 2014

David Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices, noted that November's month-to-month readings for the 10 and 20-city home price indices indicated that Phoenix, Arizona, Los Angeles California and Las Vegas, Nevada had each posted 20 or more consecutive months of rising home prices.

While positive in his remarks about increasing home prices, Mr. Blitzer also noted that indicators suggested a slower rate of growth during 2014.

This aligns with previously released economic news citing uncertainty about mortgage rates that may continue to rise as the Federal Reserve continues tapering its monthly asset purchases under its quantitative easing program.

The Fed's FOMC meeting is scheduled to end Wednesday, January 29, at which time the committee's customary statement will indicate whether or not the Fed's monthly asset purchases will be reduced from their current level of $75 billion.

On the positive side, Chairman Blitzer said that the low inflation rate (1.50 percent in 2013) and rising home prices are helping homeowners accumulate home equity at a faster pace.

What's Ahead For Mortgage Rates This Week - December 2, 2013

The short holiday week brought a flurry of economic reports last week. Highlights included pending home sales, the S&P Case-Shiller Housing Market Indices and the FHFA home price index. No reports were released on Thursday and Friday in observance of the Thanksgiving holiday.

The NAR released its Pending Home Sales report for October. Although pending home sales dropped by -0.60 percent, the decline was less than September’s reading of -4.60 percent.

NAR cited higher home prices and mortgage rates along with concerns over the then-pending government shutdown as factors that contributed to fewer pending sales. Pending sales are determined by signed purchase contracts and are considered an indication of future completed home sales and mortgage loan closings.

Department of Commerce reported that building permits issued increased from 974,000 in September to 1.03 million for October. Permits for multi-family dwellings rose by 17 percent from September, but permits for single-family homes rose by 1.00 percent.

A lagging supply of available single-family homes has been driving home prices up as demand also increases. The multi-family reading reflected the sector’s volatile nature and was largely concentrated in the West.

Case-Shiller And FHFA Report Higher Year-Over-Year Average Home Prices

The S&P Case-Shiller 20-City Housing Market Index for September reported its highest year-over-year gain in seven years, but the month-to-month reading was lower. The year-over-year reading was 13.30 percent in September and the month-to-month reading showed lackluster growth at 0.70 percent.

When seasonally adjusted, September’s reading was 1.00 percent against the seasonally-adjusted August reading of 1.90 percent.

In addition to the then-looming government shutdown, concerns over rapidly rising home prices in the West may have caused would-be buyers to sit on the sidelines as fears of another “housing bubble” gained traction.

Rising home prices also impact affordability and impact the ability of buyers depending on mortgage loans to compete with cash buyers.

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, issued its housing market index report for September. Based on sales of homes financed with Fannie Mae or Freddie Mac-owned mortgages, FHFA’s report indicated that year-over-year home prices at an annual rate of 8.50 percent in September as compared to August’s year-over-year reading of 8.40 percent.

Economists noted that the increase of home prices is slowing due to a number of factors including higher mortgage rates and restrictive lending policies that are making it more difficult for buyers to purchase homes.

Analysts said that next year could bring a more sustainable rate of home appreciation with year-over-year readings averaging between five and eight percent.

Freddie Mac issued its weekly Primary Mortgage Market Survey on Wednesday; average mortgage rates for 30 and 15 year mortgages rose to 4.29 percent and 3.30 percent respectively.

Discount points for fixed rate mortgages were unchanged at 0.70 percent. The average rate for a 5/1 adjustable rate mortgage dropped by one basis point to 2.94 percent with discount points unchanged at 0.50 percent.

What’s Ahead

This week’s scheduled economic reports include Construction Spending, ADP Employment, New Home Sales and the Fed’s Beige Book. The Bureau of Labor Statistics will release its Non-farm Payrolls report and the national unemployment rate.

Weekly jobless claims and Freddie Mac’s Primary Mortgage Market Survey will be released as usual on Thursday.

Home Prices Record Highest Monthly Gains Since Case Shiller Index Inception

The S&P Case-Shiller Home Price Indices for April indicate that the housing recovery gained ground.

In April 2013 average home prices tracked in the Case-Shiller 10 and 20-city Composites increased by 11.60 and 12.10 percent year-over-year. On a month-to-month basis, the Composites increased by 2.60 and 2.50 percent respectively.

According to David M. Blitzer, Chairman of the S&P Dow Jones Indices' Index Committee, the 10-and 20- City Composites experienced their largest month- to- month gains since their inception: "Thirteen cities posted month- to-month gains of two percent or more, with San Francisco leading with a month-to-month gain of 4.90 percent."

The 10-and-20 City Indices reported the highest year-over-year gains in home prices since 2006.  Cities where home prices gained more than 20 percent year-over-year included Atlanta, Las Vegas, Phoenix and San Francisco. Phoenix posted its 12th consecutive month of double-digit increases in home prices while San Francisco home prices increased year-over-year by an average of 23.90 percent. Home prices increased year-over-year in 19 the 20 cities included in the 10-and 20 City Composites, with home prices in Detroit remaining flat.

Mortgage Loan Requirements Showing Signs Of Loosening

Mr. Blitzer also noted that according to the most recent Fed Senior Loan Officer Opinion Survey, some lenders are beginning to relax credit requirements for mortgage loans. This good news, along with the availability of adjustable-rate mortgage loans is expected to help with maintaining affordability and providing access to homes for more buyers.

According to the S&P Case-Shiller 10-and-20 City Composites, home prices fell approximately 26 to 27percent from their highest in June 2006 to their lowest in March 2012. As of April 2013, average home prices had recovered by 13.10 percent for the 10-City Composite and 13.60 percent for the 20-City Composite.

More Reports Show Ongoing Housing Recovery

The Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, reported that home prices increased an average of 7.40 percent year-over-year as of April 2013, and rose by 0.70 percent between March and April 2013. While this data fell short of an expected month-to-month increase of 1.10 percent, Average FHFA home prices were 11.70 percent below their peak in April 2007.

FHFA bases its report on sales of homes financed with mortgages owned or securitized by Fannie Mae and Freddie Mac.

The U.S. Commerce Department reported that sales of new homes reached a five-year high in May, the highest level since July 2008. May sales increased 2.10 percent between April and May 2013 to a seasonally-adjusted annual rate of 476,000 homes. This represents a year-over-year increase of 29 percent from May 2012.

While rising mortgage rates and home prices may slow demand for homes, economists don't believe that either factor will halt the housing recovery. A good next step is asking your trusted real estate professional about current home values and loan options in and around Brooklyn, NY.

Case-Shiller Reports Energetic Annual Home Price Gains Nationally

The most recent S&P/Case-Shiller Index showed all three composites posting double-digit increases over the last four quarters.  The national composite, which is the broadest based index, showed an increase of 10.2% annually. The 20-City composite posted even stronger annual growth at 10.9%.

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The Case-Shiller Index measures changes in home prices by tracking same-home sales using 10-City, 20-City and national housing markets; and the change in sales price from sale-to-sale. Detached, single-family residences are used in the Case-Shiller Index methodology and data is for closed purchase transactions only.

12 Of 20 Metro Markets Notch Double-Digit Annual Growth

Between March 2012 and March 2013, home values rose in all 20 Case-Shiller Index markets. Phoenix, Arizona (+22.5%) once again was leading the national price recovery, quite possibly due to its precipitous fall during the onset of the housing crisis.

Another notable gainer was San Francisco (+22.2%), followed by Las Vegas, Nevada (+20.6%)  On the weaker end were Boston (+6.7%), Cleveland (+4.8%) and New York (+2.6%), but it is important to note that even these smaller numbers still represent significant gains across the board.

There were a total of 12 year-over-year double digit gainers in home value which included those mentioned above as well as Atlanta, Detroit, Los Angeles, Miami, Minneapolis, Portland, San Diego, Seattle and Tampa.

All 20 Metro Markets Show Positive Growth For 3 Consecutive Months

In another very strong supporting point for the housing recovery, all 20 metro markets measured showed positive home price growth for at least 3 consecutive months.  This consistency in growth contributes to an overall indication of strength in the housing sector rebound.

The only potential back-pedaling in the report came from noting that higher than normal multi-family housing numbers, large numbers of homes still in the foreclosure process, and significant investor activity may demonstrate that the housing recovery is not yet complete.

This latest S&P/Case-Shiller Home Price Indices report seems to indicate that the housing market continues to show positive growth.  

Now may very likely be the best time to move forward with your next Brooklyn, NY real estate transaction.  A positive next step is to call your local, trusted real estate professional for advice today. 

Case-Shiller Home Price Indices Post Highest Growth Rates Since 2006

Housing markets continue to improve according to the S&P Case Shiller Home Price Indices released April 30 for February's data.

The Indices consist of a 10-City Composite Index and a 20-City Composite Index with housing markets for each city reported based on a three-month rolling average of home prices.

Case Shiller Posts Highest Growth Rates Since 2006

The data released yesterday comprised the Indices' highest growth rates since May 2006.

For the 12 months between February 2012 and February 2013, the 10-City Composite Index reports that average home prices posted a gain of 8.6 percent and average home prices for the 20-City Composite Index grew by 9.3 percent on a non-seasonally adjusted basis. 

All 20 cities posted a year-over-year gain for at least two consecutive months.

The 10-City Composite Index grew by 0.4 percent between January and February, while the 20-City Composite Index grew by 0.3 percent for the same time period.

16 of the 20 cities reported rising annual growth rates for home sales between January and February 2013, while four cities including Detroit, Miami, Minneapolis and Phoenix saw decreases between -0.1 and -0.4 percent in annual home prices between January and February 2013 readings.

Longer-term readings provide a more positive light, as with the example for Phoenix, Arizona.

The month-to-month reading of annual home prices indicated a decrease, but the reading for Phoenix year over year indicates a + 23.0 percent increase in average home prices.

Ten Metro Areas Gain Double Digits Over Past Year

10 cities posted double-digit year-over-year growth rates; they include Atlanta, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, Phoenix, San Diego, San Francisco and Tampa.

San Diego and Tampa have joined the double-digit cities in February with average home prices increasing for each city of just over 10 percent.

Phoenix, San Francisco, Las Vegas and Atlanta posted the highest year-over-year gains in average home prices.

Three older cities, New York, Boston and Chicago posted the lowest year-over-year rates in average home price readings.

Atlanta and Dallas achieved the highest annual growth rates since the inception of the 10-City Composite (1991) and the 20-City Composite (2001).

Improving Housing Markets Seen As Beacon Of Economic Recovery

Improving housing markets are considered a leading indicator of overall economic recovery as home ownership typically increases wealth and leads to more spending.

Economists note that while current news for housing markets is good, average home prices remain at 2003 levels, which can be very good for new home buyers.

Shortages of available homes in some areas and news that apartment construction is increasing can impact availability and ultimately, the sale of single-family homes.

 

Home Prices Accelerate In 2013 WIth Double Digit Growth

Last week, the S&P/Case-Shiller Index showed home prices gaining 8.1 percent during the 12-month period ending January 2013, marking the largest year-over-year increases since the summer of 2006.

The Case-Shiller Index measures changes in home prices by tracking same-home sales throughout 20 housing markets nationwide; and the change in sales price from sale-to-sale.

Detached, single-family residences are used in the Case-Shiller Index methodology and data is for closed purchase transactions only.

All 20 Case Shiller Index Markets Show Growth

Between December 2012 and January 2013, home values rose in all 20 Case-Shiller Index markets, with previously-hard hit areas such as Phoenix, Arizona leading the national price recovery.

Another notable gainer was New York, which posted the first year-over-year increase following 28 straight months of negative annual returns.

The top three yearly “gainers” for as of January 2013 were:

• Phoenix, Arizona : +23.2 percent
• San Francisco, California :  +17.5 percent
• Las Vegas, Nevada : +15.3 Percent

Other year-over-year double digit gainers in home value were Atlanta, Detroit, Los Angeles, Miami, and Minneapolis.

Broader Numbers Support Widespread Housing Recovery

These strong annual home value increases continue to support the overall housing recovery.

There have been year-over-year double digit increases in home building permits and new housing starts as of February 2013 as well.

And foreclosure filings have fallen to only three-fourths of their previous annual levels.

It should be noted, however, that the Case-Shiller Index is an imperfect gauge of home values.

First, as mentioned, the index tracks changes in the detached, single-family housing market only. It specifically ignores sales of condominiums, co-ops and multi-unit homes. 

Second, the Case-Shiller Index data set is limited to just 20 U.S. cities. There are more than 3,000 cities nationwide, which illustrates that the Case-Shiller sample set is limited.

And, lastly, the home sale price data used for the Case-Shiller Index is nearly two months behind its release date, rendering its conclusions somewhat out-of-date.

That said, the Case-Shiller Index joins the bevy of home value trackers pointing to home price growth over the last year. 

A good next step for getting up-to-date home values in the Brooklyn, NY area is to contact a qualified, licensed real estate professional.

Metro Area Home Values Continue To Shine

The Standard and Poor’s Case-Shiller Home Price Indices released February 26 show strong growth in the majority of 20 cities and corresponding metro areas tracked during 2012.

The S&P Case-Shiller Home Price Indices measure home prices nationally and locally by compiling data from individual indexes including a 10-City Composite Index,  a 20-City Composite Index, and a 20-Metro Area Index that includes metro areas for each of the 20 cities used in the 20-City Composite.

Metro Areas Show Nearly Universal Growth

19 of 20 metro areas showed higher home prices in Q 4 2012 with the New York metro area showing a decrease in home prices; this could be due in part to the impact of Hurricane Sandy.

Highlights include:

The Atlanta and Detroit metro areas saw Q4 2012 Atlanta home prices increase by 9.9 percent year-over year, while Detroit home prices rose by 13.6 percent as compared to Q4 2011.

Home prices in the Phoenix Metro area improved by 23 percent compared to Q4 2011 for the highest year-to-year increase of all metro areas in 2012.

The 10 and 20 city indices and national home price composite improved as well.

The 10 and 20-city composites have gained approximately 8 to 9 percent since reaching their most recent lows in March of 2012; current readings indicate that home values have returned to autumn 2003 levels, but remain about 30 percent lower than they were at their peaks in June and July 2006.

On a month-to-month basis, both the 10-and 20- city composite Indices returned to positive readings with each rising by 0.2 percent, which recovered last month's losses of 0.2 and 0.1 percent respectively.

The national home price composite is determined from information taken from the 9 geographic divisions established by the U.S. Census Bureau.

It rose by 7.3 percent year-to-year, but fell short of the Q3 2012 reading by 0.3 percent.

While some areas are still facing challenges, some cities and metro areas where home values declined the most are rebounding nicely.

All in all, it is quite apparent that the broad U.S. housing markets are recovering.