The latest FNC Residential Price Index (RPI) shows U.S. home prices continuing to rise at a modest pace despite at a flatter rate when compared to the spring and summer months. This trend largely reflects a decline in housing activity. The index, constructed to gauge underlying property value based on non-distressed home sales only, was up 0.5 percent in November despite greater downward pressure from rising foreclosure sales during the month. In November, completed foreclosure sales nationwide rebounded to 16.8 percent of total home sales, up from October’s 14.4 percent or August’s post-crisis lows of 12.6 percent. Meanwhile, forward-looking indicators from the for-sale market show that the December sales-to-list price discount is unchanged from November’s 4.6 percent.
FNC’s RPI is the mortgage industry’s first hedonic price index built on a comprehensive database that blends public records of residential sales prices with real-time appraisals of property and neighborhood attributes. As a gauge of underlying home values, the RPI excludes sales of foreclosed homes, which are frequently sold with large price discounts, reflecting poor property conditions.
Based on recorded sales of non-distressed properties (existing and new homes) in the 100 largest metropolitan areas, the FNC national composite index shows that in November home prices rose at a seasonally unadjusted rate of 0.5 percent, which slightly outpaced October’s price gain. The two narrower indices (30- and 10-MSA composites) likewise show a small uptick in November’s price increase in the nation’s top housing markets. The indices’ year-over-year trends show that as of November 2013 (or 21 months into the housing recovery), annual home price appreciation has reached about 7.0 percent -- a pace last observed in August 2006.
Among the country’s major metropolitan areas, Seattle, Columbus, and Nashville recorded the largest price increase in November at 2.6 percent, 2.4 percent, and 2.1 percent respectively. Home prices were up again at a brisk pace in Riverside-CA, Miami, and Orlando (1.8 percent, 1.6 percent, and 1.4 percent, respectively) following a strong performance in the previous month (1.9 percent, 2.4 percent, and 1.5 percent, respectively). Riverside in particular, is exhibiting rapid price accelerations in recent months, averaging 2.0 percent per month since May 2013, while the city’s foreclosure sales continue to decline rapidly. As of November, Riverside continues to have the highest foreclosure sales rate (11.7 percent, as a percentage of total home sales) among California’s largest metros.
Home prices moved lower in four metro areas, most notably in Denver where the city’s RPI has declined for a fourth month since August. The city’s year-over-year growth in recent months has slowed significantly compared to the same period last year when the market was in a strong rebound mode. San Diego and San Francisco are also experiencing similar year-over-year growth decelerations – or likely a return to more sustainable growth. The cities’ foreclosure sales are down to pre-crash levels (6.7 percent and 4.9 percent, respectively). In contrast, home prices in Las Vegas, Phoenix, Riverside, Los Angeles, and several of the other hard-hit cities appear to be continuing in a strong recovery with year-over-year growth in double digits. Foreclosure rates in St. Louis and Cleveland (18.1 percent and 20.0 percent, respectively) continue to be among the highest in the nation.
