February Home Prices Kick Off Solid Start to Home-Buying Season – NMP Skip to main content

February Home Prices Kick Off Solid Start to Home-Buying Season

NationalMortgageProfessional.com
Mar 07, 2013

Clear Capital has released its Home Data Index (HDI) Market Report with data through February 2013. Using a broad array of public and proprietary data sources, the HDI Market Report publishes the most granular home data and analysis earlier than nearly any other index provider in the industry. Report highlights include: ► February's home prices are up 6.1 percent over the year. ► Quarterly price trends at the national and regional levels show moderate improvement over the typically slow winter season. ► 11 of 15 of the lowest performing major metro markets saw quarterly price trends in February give way to minor losses. “While February's yearly growth of 6.1% is encouraging, let's keep in mind this rate of growth is measured against the market's bottom, which we reported in our March 2012 Market Report,” said Dr. Alex Villacorta, director of research and analytics at Clear Capital. “Consumer confidence continues to be vital to a broader housing recovery, and national quarterly home prices expanding 1.0 percent in the midst of winter is confirmation the recovery has legs. While 1.0 percent is weaker in comparison to more recent rates of quarterly growth, the positive trend continues to support homebuyer confidence and is on par with the new normal. Recent updates on the regulatory front could also build momentum in the housing revival. The Qualified Mortgage (QM) rule gives lenders more definition on extending credit to homebuyers, who continue to be encouraged by positive economic signs. The real question now is how many of those sidelined borrowers will qualify for a loan under the new rules. All told, February's home data shows the housing recovery is on track.” February Quarterly Trends: Prices remain mostly unchanged. Will slow and steady win the race? National and regional home price trends remained stable and nearly flat in February, as prices continued to hold their ground over the slow winter months. National quarterly growth of 1.0 percent was supported by quarterly growth of 2.1 percent, 0.4 percent, 0.7 percent, and 0.8 percent in the West, Midwest, Northeast, and South, respectively. While the West continued to lead the recovery, the Midwest, Northeast, and South's quarterly home prices remained flat over January. While these trends are modest in comparison to the aggressive rates of appreciation the market saw during the run-up, they do make an impression on consumers. By not dropping during the slow winter season, small quarterly growth could encourage consumers to re-engage in the housing market. February Yearly Trends: Strongest national growth since August 2010. National yearly growth of 6.1 percent in February marked the strongest yearly gains since August 2010 when the Homebuyer Tax Credit was boosting demand. While current home prices have improved notably over last year, gains are expected to moderate over the short term, as current yearly gains are measured against the market lows in 2012. Each region, like the nation, experienced stronger yearly home price gains, compared to last month's trends. The West, fueled by progress in markets like Las Vegas, Phoenix and Sacramento, was the only region to post double digit gains at 13.6 percent. While many of the strongest metro housing markets reside in the West, the Midwest, Northeast, and South each made noteworthy progress in February. Yearly home price gains of 4.0 percent, 2.6 percent and 5.1 percent, respectively, are significant in their own right. These incremental gains may continue to fuel consumer confidence as rising home prices throughout the winter season build more trust in a sustained housing recovery. Highest performing major metro markets continued to see gains in February. February home price trends in the strongest metro markets remained positive, with short term quarterly gains across the board. A handful of leading recovering markets, like Atlanta, Las Vegas, Phoenix, and Miami, remained in growth mode. But their relatively low price points overall subject their short term trends to potential volatility moving forward. The highest performing markets’ yearly growth remained robust in February. 12 out of the 15 markets achieved double digit year-over-year price gains, and all markets on the list returned yearly gains above 8.0 percent. Strength in longer term trends most distinguishes the highest performing markets from the lowest performing markets. Lowest performing major metro markets began to experience quarterly declines in February, though not overly concerning. The lowest performing markets shifted into contraction territory in February, with 11 out of 15 seeing slight quarterly declines. While the number of markets experiencing price declines expanded in February, from five to 11, nine of the 11 fell less than half a percent. These minor declines are far from alarming, but something to keep an eye on. While the lowest performing markets showed some signs of weakness, they remain stable in a year-over-year review. Just six metros on this list posted year-over-year declines, with five of them experiencing less than 2.0 percent in price erosion. Given these metros represent the price trend floor for markets across the country, their relative stability is encouraging. Overall, the U.S. housing market continued to hold up well in February and with spring just around the corner, we head into the more active home buying season on solid ground.
Published
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