Headlines – Week of October 28, 2012
November 9, 2012
U.S. Home Values Jump the Most Since 2006
Two separate reports provide evidence that home values are rising.
According to a new study by CoreLogic, U.S. home prices jumped 5 percent in September compared with a year ago, the largest year-over-year increase since July 2006.
The data provided in the report also said that prices declined 0.3 percent in September from August, the first drop after six straight increases. The monthly figures are not seasonally adjusted and the company believes the monthly decline reflects the end of the summer home-buying season and not a softening in the housing recovery.
Steady price increases should give the housing market more momentum when home sales pick up in the spring. Rising prices encourage more homeowners to sell their homes and entice would-be buyers to purchase homes before prices rise further.
Other measures have also shown healthy gains in home prices over the past year. The Standard & Poor’s/Case Shiller 20-city index rose 2 percent in August compared with a year ago, a faster pace than the previous month.
The price gains in the past year reported by CoreLogic were widespread. Prices have risen in all but seven states. And they declined in only 18 out of 100 large cities that are tracked by the index.
Some of the biggest increases were in states that suffered the worst from the housing bust. Home prices in Arizona jumped 18.7 percent in the past year, the most of any state. Home prices in Idaho rose 13.1 percent, the second largest. Nevada’s home values rose 11 percent.
Home prices jumped 22.1 percent in Phoenix, the metro area with the biggest gain. Prices in Houston rose 6.6 percent, the second-highest increase. The states with the biggest drops were Rhode Island (3.5 percent) and Illinois (2.3 percent).
Sales of both new and previously occupied homes are still below levels that are consistent with a healthy housing market. That’s partly because the supply of available homes for sale remains low. And many prospective homebuyers are struggling to qualify for a mortgage or scrape together the bigger down payments that many banks are requiring.
CoreLogic HPI monthly updates leverage the full authority of CoreLogic’s industry-leading real estate databases, covering 6,783 Zip codes, 623 Core Based Statistical Areas (CBSAs), and 1,188 counties in all 50 states and the District of Columbia.
In a separate report, Zillow also announced that U.S. home values jumped 1.3 percent in the third quarter, the biggest gain since 2006 as the recovery was uneven across the country.
The median value rose to $153,800 from $151,800 in the previous three months on a seasonally adjusted basis. It was the biggest increase in Zillow’s Home Value Index since the first quarter of 2006, when values rose 1.5 percent.
According to the report home prices are rising nationally as the U.S. unemployment rate declines and buyers compete for a tightening supply of homes listed for sale.
Values fell from the second quarter in 52 percent of markets covered by the index as the traditional home buying season ended.
Zillow also reported that in Phoenix, where investor demand is helping to boost prices, home values rose the most of the 30 largest U.S. metropolitan areas, with a 5.9 percent increase from the second quarter. They climbed 3.9 percent in Las Vegas and 3.8 percent in Denver.
Atlanta had the biggest drop in values, falling 2.2 percent from the previous three months, the data show. New York, Philadelphia, St. Louis and Cleveland were among other large metro areas where values declined.
Zillow showed a drop in values for 17 of the 41 states it covers.
Values nationwide will increase 1.7 percent over the next year, according to Zillow’s projection. Of the 253 markets tracked by the forecast, 183 areas have hit bottom and another 41 will reach a floor in the next year, the company said.
Zillow measures the value of 100 million U.S. homes, regardless of whether they sold during the quarter, and calculates the median for its index. Other gauges, such as the S&P/Case-Shiller index, track purchase prices.
Posted by Scott R. Lodde