S&P/Case-Shiller: Home Prices Closed Out a Strong 2012

Data through December 2012, released today by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, showed that all three headline composites ended the year with strong gains. The national composite posted an increase of 7.3 percent for 2012. The 10- and 20-City Composites reported annual returns of 5.9 percent and 6.8 percent in 2012. Month over- month, both the 10- and 20-City Composites moved into positive territory with gains of 0.2%; more than reversing last month’s losses.

In addition to the three composites, nineteen of the 20 MSAs posted positive year-over-year growth – only New York fell.

The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 7.3 percent gain in the fourth quarter of 2012 over the fourth quarter of 2011. In December 2012, the 10- and 20-City Composites posted annual increases of 5.9 percent and 6.8 percent, respectively.

“Home prices ended 2012 with solid gains,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “Housing and residential construction led the economy in the 2012 fourth quarter.

In December’s report all three headline composites and 19 of the 20 cities gained over their levels of a year ago. Month-over-month, 9 cities and both Composites posted positive monthly gains. Seasonally adjusted, there were no monthly declines across all 20 cities.

“The National Composite increased 7.3 percent over the four quarters of 2012. From its low in the first quarter, it surged in the second and third quarter and slipped slightly in the 2012 fourth period. The 10- and 20-City Composites, which bottomed out in March 2012 continued to show both year-over-year and monthly gains in December. These movements, combined with other housing data, suggest that while housing is on the upswing some of the strongest numbers may have already been seen.

“Atlanta and Detroit posted their biggest year-over-year increases of 9.9 percent and 13.6 percent since the start of their indices in January 1991. Dallas, Denver, and Minneapolis recorded their largest annual increases since 2001. Phoenix continued its climb, posting an impressive year-over-year return of 23.0 percent; it posted eight consecutive months of double-digit annual growth.”

As of December 2012, average home prices across the United States for the 10-City and 20-City Composites are back to their autumn 2003 levels. Measured from their June/July 2006 peaks, the decline for both Composites is approximately 30 percent through December 2012. For both Composites, the December 2012 levels are approximately 8-9 percent above their recent lows seen in March 2012.

In December 2012, nine MSAs and both Composites posted positive monthly gains, led by Las Vegas with an increase of 1.8 percent. Eleven cities declined with Chicago posting the largest negative monthly return of 0.7 percent.

Atlanta and Detroit remain the only three cities with average home prices below their January 2000 levels. Detroit with an 80.04 print is 20 percent below its January 2000 level.

“The high end of the market is doing well and while it’s a fashionable thing to say that it is because of foreign money, I suspect the actual reason is that the one percent have gotten 122 percent of the recovery,” says USC Lusk Center for Real Estate Director, Richard Green. “Since the low end of the market is being targeted by investors, it’s the middle market that needs help – particularly in the form of higher income – if it is going to have a sustained recovery.”

For more information, visit www.homeprice.standardandpoors.com.

As Housing Market Warms, Keep These Buying Tips in Mind

(BPT) – Ready to buy your first home, or move up to a larger home for your expanding family?
Home sales seem to be finally warming up after a five-year chill, as demand gradually builds among first-time homebuyers and existing homeowners seeking more room. Historically low mortgage rates, rising rents and relatively positive economic indicators are enhancing consumer confidence and driving the trend, according to the National Association of REALTORS(NAR).

As demand grows, home prices for a median existing home are expected to rise as much as 5 percent nationwide in 2013, according to the NAR. This should encourage existing homeowners who’ve been patiently sitting on the sidelines to consider putting their homes on the market.

Even though the outlook is looking brighter, Daniel Watkins, an attorney who specializes in real estate law at the Watkins Firm, APC in San Diego, says the hurdles to buying a home in today’s market are significantly higher than they were a few years ago.

"The big hurdle is financing. Expectations among lenders and sellers are a lot higher today," Watkins says. "If you’re serious about buying a home, you need to have a sizeable down payment, a good credit score, low debt and a solid track record of employment to qualify for a loan."

Lenders are paying close attention to buyers’ ability to repay a loan, according to FindLaw.com, the nation’s leading legal information website. The generally accepted principle is that no more than 30 percent of a household’s take-home income should go toward the principal, interest, taxes and insurance.

Here are some tips from FindLaw.com about buying a home within the next six to nine months:

  • Start planning now. Even if you’re a year or more away from buying a home, start preparing now. Build up your cash for a down payment plus other expenses that come with owning a home. Check your credit report for accuracy. Pay all your bills on time and zero out all credit card debt. And don’t take on new debt, like a large car payment.
  • Get a pre-approval letter. Home sellers want to know that you can get a loan to buy their home. It’s OK to window shop, but don’t make any offers unless you are certain you can obtain financing. After shopping around for a financial institution, get pre-approved for a home mortgage. Showing a seller a pre-approval letter will increase your chances of your offer being accepted. And don’t be surprised if the seller or his real estate agent contacts your loan officer to verify that you’ve been pre-approved.
  • Build a strong buying position. As the home market warms up, bidding wars will become more common. However, the highest bid doesn’t always win in today’s housing market. Instead, home sellers want to know the deal will go through with smooth sailing. So, today, the highest value is being placed on non-contingent offers (not contingent on the sale of your home), pre-approved financing, higher-than-normal earnest money deposit and personalized bids (share with the seller why the home would be a perfect match for you and your family).
  • Get a lawyer. In some states, the law requires that a real estate attorney be part of the process of making an offer and reviewing loan documents as part of the closing, according to FindLaw.com. Where a real estate attorney isn’t required, buyers and sellers should consider seeking legal assistance for relatively more complicated real estate transactions, such as purchasing a property directly from the homeowner, the purchase of a rental property, a short sale or the purchase of a foreclosed property.
  • Learn about the neighborhood. When you buy a home, you’re also buying into a community. Start your home search by first targeting a neighborhood where you want to live. Avoid neighborhoods where homes are not being kept up, or yards are full of old cars and junk. Check out the schools, too. Great schools attract families, and keep up home values. Avoid busy streets, homes under flight patterns or near railroad tracks. And contact the local police department for crime statistics and the location of nearby sex offenders.
  • Keep your emotions in check. If you’ve found a home you like, don’t fall in love with it yet. Make sure your offer is contingent upon a satisfactory home inspection conducted by an inspector that you hire (not the seller).
  • Save some extra money. Whether you’re buying your first home or your third, moving and getting a household established can cost more than you anticipated. Make sure you save enough extra money to redecorate your new home to fit your lifestyle, and to pay for unexpected repairs.

For more information, visit www.findlaw.com.

Home Prices in 2012: Best Year-on-Year Gain in Six Years

Home Prices in 2012: Best Year-on-Year Gain in Six Years

CoreLogic®, a leading residential property information, analytics and services provider, recently released its December CoreLogic HPI® report. Home prices nationwide, including distressed sales, increased on a year-over-year basis by 8.3 percent in December 2012 compared to December 2011. This change represents the biggest increase since May 2006 and the 10th consecutive monthly increase in home prices nationally. On a month-over-month basis, including distressed sales, home prices increased by 0.4 percent in December 2012 compared to November 2012. The HPI analysis shows that all but four states are experiencing year-over-year price gains.

Excluding distressed sales, home prices increased on a year-over-year basis by 7.5 percent in December 2012 compared to December 2011. On a month-over-month basis, excluding distressed sales, home prices increased 0.9 percent in December 2012 compared to November 2012. Distressed sales include short sales and real estate owned (REO) transactions.

The CoreLogic Pending HPI indicates that January 2013 home prices, including distressed sales, are expected to rise by 7.9 percent on a year-over-year basis from January 2012 and fall by 1 percent on a month-over-month basis from December 2012, reflecting a seasonal winter slowdown. Excluding distressed sales, January 2013 house prices are poised to rise 8.6 percent year over year from January 2012 and by 0.7 percent month over month from December 2012. The CoreLogic Pending HPI is a proprietary and exclusive metric that provides the most current indication of trends in home prices. It is based on Multiple Listing Service (MLS) data that measure price changes for the most recent month.

“December marked 10 consecutive months of year-over-year home price improvements, and the strongest growth since the height of the last housing boom more than six years ago,” says Mark Fleming, chief economist for CoreLogic. “We expect price growth to continue in January as our Pending HPI shows strong year-over-year appreciation.”

“We are heading into 2013 with home prices on the rebound,” said Anand Nallathambi, president and CEO of CoreLogic. “The upward trend in home prices in 2012 was broad based with 46 of 50 states registering gains for the year. All signals point to a continued improvement in the fundamentals underpinning the U.S. housing market recovery.”

Highlights as of December 2012:

• Including distressed sales, the five states with the highest home price appreciation were: Arizona (+20.2 percent), Nevada (+15.3 percent), Idaho (+14.6 percent), California (+12.6 percent) and Hawaii (+12.5 percent).
• Including distressed sales, this month only four states posted home price depreciation: Delaware (-3.4 percent), Illinois (-2.7 percent), New Jersey (-0.9 percent) and Pennsylvania (-0.5 percent).
• Excluding distressed sales, the five states with the highest home price appreciation were: Arizona (+16.4 percent), Nevada (+14.7 percent), California (+12.8 percent), Hawaii (+11.7 percent) and North Dakota (+10.8 percent).
• Excluding distressed sales, this month only three states posted home price depreciation: Delaware (-1.9 percent), Alabama (-1.0 percent) and New Jersey (-0.5 percent).
• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to December 2012) was -26.9 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -20.8 percent.
• The five states with the largest peak-to-current declines, including distressed transactions, were Nevada (-52.4 percent), Florida (-43.5 percent), Arizona (-39.8 percent), Michigan (-36.5 percent) and California (-35.4 percent).
• Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, only 16 are showing year-over-year declines in November, two fewer than in November.

For more information, visit www.corelogic.com.

Mortgage Rates Virtually Unchanged

Freddie Mac
(Photo credit: Wikipedia)

Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates virtually unchanged and remaining near their record lows amid growing concerns around the fiscal cliff. The 30-year fixed-rate mortgage has averaged below 4.00 percent all but one week in 2012, while the 15-year fixed-rate mortgage has averaged below 3.00 percent since the last week in May.

The 30-year fixed-rate mortgage (FRM) averaged 3.32 percent with an average 0.8 point for the week ending November 29, 2012, up from last week when it averaged 3.31 percent. Last year at this time, the 30-year FRM averaged 4.00 percent.

Additionally, the 15-year FRM this week averaged 2.64 percent with an average 0.6 point, up from last week when it averaged 2.63 percent. A year ago at this time, the 15-year FRM averaged 3.30 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.72 percent this week with an average 0.6 point, down from last week when it averaged 2.74 percent. A year ago, the 5-year ARM averaged 2.90 percent.

The 1-year Treasury-indexed ARM averaged 2.56 percent this week with an average 0.5 point, the same as last week. At this time last year, the 1-year ARM averaged 2.78 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following links for Regional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

“Mortgage rates were virtually unchanged this week amid growing concerns around the fiscal cliff. Although low mortgage rates failed to boost new home sales in October, year-to-date sales are up 20 percent compared with 2011 volumes, and there are growing signs of a turnaround in house prices,” says Frank Nothaft, vice president and chief economist, Freddie Mac. “The S&P/Case-Shiller® national home price index (seasonally adjusted) rose 5.2 percent over the first three quarters of this year. In addition, all 20 of the city indices (seasonally adjusted) had positive growth over the first 9 months, led by a 17.9 percent increase in Phoenix. More recently, the Federal Reserve’s November 28th regional economic review, known as the Beige Book, noted that 10 of the 12 districts reported the market for single-family homes continued to improve leading into mid-November.”

For more information, visit www.FreddieMac.com.

Enhanced by Zemanta

November 2012 U.S. Economic And Housing Market Outlook

Freddie Mac recently released its U.S. Economic and Housing Market Outlook for November showing what a healthy national housing market should look like taking into account recent trends, key housing indicators and the shifting demographic patterns that will define a new and realistic trajectory over the next five years. A healthy housing market should have activity below the levels recorded during the peaks of the prior decade.

Outlook highlights – what a healthy housing market should look like:

  • Housing starts increasing to about 1.7 to 1.8 million dwellings per year compared with 2.1 million in 2005.
  • Home sales increasing to about 5 percent of the housing stock, or about 6.5 to 7.0 million homes per year, compared with sales of 7 percent of the stock in 2005.
  • U.S. house price appreciation rising gradually to about 3 percent per year compared to 11 percent of 2005.
  • Vacancy rates easing further to about 1.7 percent on for-sale homes and 8 percent for rental homes, down from peaks of about 3 percent in 2008 and 11 percent in 2009, respectively.
  • Serious delinquency rates nearing 2 percent, down from a peak of 9.5 percent in early 2010.
  • “What a healthy housing market should look like will dismay those who keep comparing housing to what it was during its peak years,” explains Frank Nothaft, Freddie Mac, vice president and chief economist, However, taking into account recent trends, key housing indicators and the shifting demographic patterns that will define a new and realistic trajectory toward a healthy housing market, the long-term prognosis is promising – just don’t expect the housing market to wake up at 98.6 degrees tomorrow morning.”

Source: Freddie Mac