US house prices up 65 months in a row

US house prices have risen for the last 65 months in a row, as housing inventory continues to fall.

The median existing-home price for all housing types in July was $258,300, up 6.2 per cent from July 2016 ($243,200), according to the National Association of Realtors. Growth is being underpinned by the lack of supply across the country, with total housing inventory at the end of July declining 1 per cent to 1.92 million existing homes. The supply of homes for sale is now 9 per cent lower than a year ago (2.11 million) and has fallen year-over-year for 26 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.8 months a year ago.

However, the lack of supply is also weighing on activity, as both a lack of options and rising costs slow down market momentum.

Lawrence Yun, NAR chief economist, says: “Buyer interest in most of the country has held up strongly this summer and homes are selling fast, but the negative effect of not enough inventory to choose from and its pressure on overall affordability put the brakes on what should’ve been a higher sales pace. Contract activity has mostly trended downward since February and ultimately put a large dent on closings last month.”

“Home prices are still rising above incomes and way too fast in many markets,” adds Yun. “Realtors continue to say prospective buyers are frustrated by how quickly prices are rising for the minimal selection of homes that fit buyers’ budget and wish list.”

Listings in July typically went under contract in under 30 days for the fourth consecutive month because of high buyer demand, but existing-home sales ultimately pulled back, with large declines in the Northeast and Midwest outweighing sales increases in the South and West.

Total existing-home sales slipped 1.3 per cent to a seasonally adjusted annual rate of 5.44 million in July from a downwardly revised 5.51 million in June. July’s sales pace is still 2.1 per cent above a year ago, but is the lowest of 2017.

“July was the fourth consecutive month that the typical listing went under contract in under one month,” continues Yun. “This speaks to the significant pent-up demand for buying rather than any perceived loss of interest. The frustrating inability for new home construction to pick up means inadequate supply levels will keep markets competitive heading into the fall.”

The national median existing-home price this year is expected to increase around 5 per cent, slightly slower than the 5.1 per cent price growth recorded in 2016.

 

US house prices jump 6.5pc to new peak

14th August 2017

US house prices have jumped 6.5 per cent in the last year to reach a new peak.

New figures from the National Association of Realtors show that the median existing-home price for all housing types in June was $263,800, up 6.5 percent from June 2016 ($247,600). Last month’s median sales price surpasses May’s previous record and marks the 64th straight month of year-over-year gains.

Rising prices are a welcome indicator of the market’s recovery, but are also an obstacle for first-time buyers trying to get on the property ladder.

Indeed, first-time buyers accounted for 32 per cent of sales in June, which is down from 33 per cent both in May and a year ago. NAR’s 2016 Profile of Home Buyers and Sellers – released in late 2016 – revealed that the annual share of first-time buyers was 35 per cent.

Low supply remains a key driver of price increases. Total housing inventory at the end of June declined 0.5 per cent to 1.96 million existing homes available for sale, and is now 7.1 per cent lower than a year ago (2.11 million). Indeed, stock levels have now fallen year-over-year for 25 consecutive months. Unsold inventory is at a 4.3-month supply at the current sales pace, which is down from 4.6 months a year ago.

“It’s shaping up to be another year of below average sales to first-time buyers despite a healthy economy that continues to create jobs,” said Yun. “Worsening supply and affordability conditions in many markets have unfortunately put a temporary hold on many aspiring buyers’ dreams of owning a home this year.”

The ongoing price growth may also be causing some investors to step away from the market, adds Yun: “Fewer investors paying in cash is good news as it could mean a little less competition for the homes first-time buyers can afford. However, the home search will still likely be a strenuous undertaking in coming months because supply shortages in most areas are most severe at the lower end of the market.”

Increases in property value, though, shows no sign of stopping: the national median existing-home price this year is expected to increase around 5 per cent, on pace with last year, when existing sales increased 3.8 percent and prices rose 5.1 per cent.

 

US house prices up 62 months in a row

16th June 2017

US house prices have risen for 62 months in a row, as the market’s recovery continues.

The median existing-home price for all housing types in April was $244,800, up 6 per cent year-on-year, according to the National Association of Realtors, marking over five years of consistent annual gains every month.

The price growth is fuelled by low supply in the face of strong demand. Total housing inventory at the end of April climbed 7.2 per cent to 1.93 million existing homes, according to Realtors, but is still 9 per cent lower than a year ago (2.12 million) and has fallen year-over-year for 23 consecutive months.

“Realtors continue to voice the frustration their clients are experiencing because of the insufficient number of homes for sale,” says Lawrence Yun, NAR chief economist. “Homes in the lower- and mid-market price range are hard to find in most markets, and when one is listed for sale, interest is immediate and multiple offers are nudging the eventual sales prices higher.”

Total existing-home sales dipped 2.3 per cent to a seasonally adjusted annual rate of 5.57 million in April, with every major region except for the Midwest seeing a decrease. Despite the decline, though, sales are still 1.6 per cent above a year ago and at the fourth highest pace over the past year.

“Last month’s dip in closings was somewhat expected given that there was such a strong sales increase in March at 4.2 percent, and new and existing inventory is not keeping up with the fast pace homes are coming off the market,” adds Yun. “Demand is easily outstripping supply in most of the country and it’s stymieing many prospective buyers from finding a home to purchase.”

For those who can, though, the prospect for capital growth will come as good news.

 

US house prices jump 7.1 per cent

5th May 2017

US house prices have jumped 7.1 per cent in the last year, according to new figures from CoreLogic.

Property values increased month over month by 1.6 per cent in March 2017, taking the CoreLogic index to just 2.8 per cent below its 2006 peak.

“A potent mix of strong job gains, household formation, population growth and still-attractive mortgage rates in the face of tight inventories are fueling a continuing surge in home prices,” says Frank Martell, president and CEO of CoreLogic. “Price gains were broad-based with 90 percent of metropolitan areas posting year-over-year gains.

Gains were strongest in the West with Washington showing the highest appreciation at almost 13 percent, and Seattle, Tacoma and Bellingham posting gains of 13 to 14 percent.

“Prices in more than half the country have already surpassed their previous peaks, and almost 20 percent of metropolitan areas are now at their price peaks,” adds Dr. Frank Nothaft, chief economist for CoreLogic. “Nationally, price growth has gradually accelerated over the past half-year, while rent growth for single-family rental homes has slowly decelerated over the same period, according to the CoreLogic Single-Family Rental Index, recording a 3 percent rise over the year through March.”

That peak is expected to be matched in the second half of this year, with prices forecast to rise by 4.9 per cent in the next 12 months.

 

US house prices up 6.9pc ahead of strong spring buying season

10th March 2017

US house prices rose 6.9 per cent in 2017, kicking off a strong year in which expectations are upbeat for the spring buying season.

Home prices nationwide, including distressed sales, increased year-on-year by 6.9 per cent in January 2017 compared with January 2016, according to CoreLogic, with month-on-month price growth at 0.7 per cent.

“With lean for-sale inventories and low rental vacancy rates, many markets have seen housing prices outpace inflation,” says Dr. Frank Nothaft, chief economist for CoreLogic. “Over the 12 months through January of this year, the CoreLogic Home Price Index recorded a 6.9 per cent rise in home prices nationally and the CoreLogic Single-Family Rental Index was up 2.7 percent—both rising faster than inflation.”

Prices are forecast to grow 4.8 per cent across 2017, with the outlook upbeat for the coming months.

“Home prices continue to climb across the nation, and the spring home buying season is shaping up to be one of the strongest in recent memory,” comments Frank Martell, president and CEO of CoreLogic. “A potent mix of progressive economic recovery, demographics, tight housing stocks and continued low mortgage rates are expected to support this robust market outlook for the foreseeable future. We expect the CoreLogic Home Price Index to rise 4.8 percent nationally over the next 12 months, buoyed by lack of supply and continued high demand.”

 

US house price growth at 30-month high

3rd March 2017

US house price growth is at a 30-month high, as values continue to climb across the country.

The latest S&P CoreLogic Case-Shiller Indices show that house prices climbed 5.8 per cen year-on-year in December 2016, up from 5.6 per cent in November and the fastest rate of growth in two and a half years.

The index’s 10-City composite posted a 4.9 per cent annual increase, up from 4.4 per cent the previous month. The 20-City composite reported a year-over-year gain of 5.6 per cent, up from 5.2 per cent in November.

Seattle, Portland, and Denver reported the highest year-over-year gains among the 20 cities over the 11 months leading up to December. Seattle led the way with a 10.8 per cent year-over-year price increase in December, followed by Portland with 10 per cent, and Denver with an 8.9 per cent increase. 12 cities reported greater price increases in the year ending December 2016 versus the year ending November 2016.

“Home prices continue to advance, with the national average rising faster than at any time in the last two-and-a-half years,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “With all 20 cities seeing prices rise over the last year, questions about whether this is a normal housing market or if prices could be heading for a fall are natural. In comparing current home price movements to history, it is necessary to adjust for inflation. Consumer prices are higher today than 20 or 30 years ago, while the inflation rate is lower. Looking at real or inflation adjusted home prices based on the S&P CoreLogic Case-Shiller National Index and the Consumer Price Index, the annual increase in home prices is currently 3.8 per cent. Since 1975, the average pace is 1.3 per cent; about two-thirds of the time, the rate is between -4 per cent and 7 per cent. Home prices are rising, but the speed is not alarming.”

 

West continues to lead US house price growth

6th June 2016

The West continues to lead house price growth in the US, as the market’s recovery spreads across the whole country.

The latest S&P/Case-Shiller index found that prices grew 5.2 per cent year-on-year in March 2016, down from 5.3 per cent the previous month. The 10-City Composite and the 20-City Composites’ year-over-year gains remained unchanged at 4.7 per cent and 5.4 per cent, respectively, from the prior month.

Portland, Seattle, and Denver (pictured) reported the highest year-over-year gains among the 20 cities with another month of annual price increases. Portland led the way with a 12.3 per cent year-over-year price increase, followed by Seattle with 10.8 per cent, and Denver with a 10 per cent increase.

After seasonal adjustment, the National Index recorded a 0.1 per cent month-over-month increase overall, suggesting a slowdown in growth. Indeed, recent research from Clear Capital found that national growth in property values was “virtually unchanged” over the three months to April 2016, with values edging up at a moderate pace of 0.6 per cent, quarter-over-quarter.

The West, though, continues to lead the pack, with Clear Capital saying that sales during the month of April “really kicked off the start of the real estate busy season”.

“This momentum shift is setting the pattern for another strong summer growth season as the region begins to dominate regional performance once again,” added the report.

Portland, San Jose, and Denver are also highlighted by Clear Capital as having surpassed their previous peak market values from before the crash, with Seattle “fast approaching its own benchmark”.

Performance is varied, though, with homes in Las Vegas fetching just over half of peak market values from ten years ago.

“Real estate market headlines have repeatedly documented the strong, potentially bubble-like recovery of the West over the past couple years, and this continued trend of performance doesn’t appear to be going away just yet. However, it’s important to remember just how varied the standing of each of these Western metro’s recoveries remains. While the West as a whole has seen incredible performance since the lows of 2011, comparisons between individual markets like Denver and Las Vegas can be a sobering reminder of the devastating effects of the crash and that some markets still have a long way to go in terms of regaining lost value,” commented Alex Villacorta, Ph.D., vice president of research and analytics at Clear Capital.

Nontheless, the mood is generally upbeat, thanks to affordable financing and an improving economy supporting the employment market across the USA.

“Home prices are continuing to rise at a 5 per cent annual rate, a pace that has held since the start of 2015,” says David M. Blitzer, Managing Director & Chairman of the Index Committee at S&P Dow Jones Indices. “The economy is supporting the price increases with improving labor markets, falling unemployment rates and extremely low mortgage rates. Another factor behind rising home prices is the limited supply of homes on the market. The number of homes currently on the market is less than two percent of the number of households in the U.S., the lowest percentage seen since the mid-1980s.”

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