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Home Prices Continue to Benefit From Active Spring Buying Season

NationalMortgageProfessional.com
Jul 02, 2013

Clear Capital released its Home Data Index (HDI) Market Report with data through June 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. The forecast through June 2013 reveals trends that highlight the overall recovery’s strength and potential for sustainability. Nationally, home prices continue to benefit from the more active spring buying season. Quarterly, yearly and two quarter forecasts all came in stronger at 1.4 percent, 8.6 percent, and 1.7 percent respectively, relative to months past. A more optimistic update to the total 2013 national forecast of six percent over the 2.6 percent growth projected in our April 2013 report is attributed to increasing home price gains across much of the nation, continuous improvements in distressed market measures and improvements in broad-based economic inputs, such as consumer confidence. “June home price trends and forecasts were nearly all positive across the country,“ said Dr. Alex Villacorta, vice president of research and analytics at Clear Capital. “We saw quarterly, yearly and six month forecasts all tick up, relative to the past few months’ performance. These improved trends signal spring buying activity continues to have a positive impact, while our forecasts point to moderation ahead. Certainly this is an interesting and important dynamic unfolding and while it could seem contradictory at the surface, perspective lends clarity." Should 2013 forecasts be realized, the housing market would outperform historical average gains between four percent and five percent, but indicate moderation from the current yearly gains of 8.6 percent. Meanwhile, home price regionally gains saw moderate growth in the short-term, long-term and forecast. The West, South, Midwest and Northeast are forecasted to see total 2013 gains of 10.1 percent, 5.2 percent, 4.6 percent and 4.1 percent, respectively. These gains are comprised of year-to-date growth and two quarter forecasts of 2.2 percent, 1.5 percent, 1.8 percent and 1.5 percent, respectively. Moderation is key to a sustained recovery. With this in mind, projected regional growth rates are healthy compared to year-over-year gains through June of 17.1 percent, 7.1 percent, 6.2 percent and 4.3 percent, respectively. While metro level market trends showed continued variability, they remained positive overall. Local market economic fundamentals continue to drive varying degrees of price growth. Forty-five out of the top 50 major metro markets are forecasted to see yearly growth over the final two quarters of 2013. Four of the five markets not expected to see home price gains over the next two quarters are projected to see declines of less than 0.5 percent. "Increasing gains are great news for homeowners and to be expected at this time of the year, when home buyers are typically most active," said Dr. Alex Villacorta. "While there is a lot of buzz right now in terms of double digit housing gains, over the long run, we don’t expect to see the current rates of growth sustained. Keep in mind this is really not a bad thing. National growth for all of 2013 is expected to hit six percent, lower than current yearly growth of 8.6 percent, yet higher than historical norms between four percent and five percent. After more than a full year of recovery, we consider the current momentum and expected moderation a really healthy move toward a more sustained recovery."
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