Market Studies

Lender Processing Services' Home Price Index, which reflects transacted sales rather than recorded sales, revealed that the average U.S. home price increased to $205,000 in August, up 0.2 percent from July. The average home price in August 2011 was $199,000, or 2.6 percent less than this year's reading. The most recent price increase brings the HPI up 4.6 percent from January 2012. Minnesota and Michigan led all states in month-over-month price gains, reaching growth of more than one percent.

Summer's end may have led to the close of a strong home-buying season, but a decrease in distressed sales is helping prices maintain their yearly gain and some regions are still experiencing monthly price increases. As of August 23, 2012, prices fell 0.4 percent in 25 major U.S. metropolitan areas from July 23, 2012, according to Radar Logic. Year-over-year, prices were still up 4.5 percent, coinciding with a significant decrease in REO and foreclosure auction sales.

Led by increases in personal consumption, government spending and residential investment, the U.S. economy grew 2.0 percent in the third quarter, the Bureau of Economic Analysis reported Friday, faster than economists expected and a strong rebound from the 1.3 percent growth rate in the second quarter. Economists surveyed by Bloomberg had expected an increase of 1.9 percent.

A steady drop in distressed home sales may spell a better future for builders, Capital Economics analyst and property economist Paul Diggle says. In a US Housing Market Update released by the firm, Diggle notes that while a substantial overhang of properties still in the shadow inventory will keep distressed sellers in the market, the peak in distressed supply appears to be well behind us, giving homebuilders more room to grow with less competition from discounted existing homes.

Mortgage rate movement this week was ""so slight it was almost nonexistent,"" according to data from Freddie Mac and Bankrate.com. Freddie Mac's survey showed a bit of movement in fixed rates, with the 30-year fixed averaging 3.41 percent (0.7 point), up from 3.37 percent in the previous survey. The 15-year fixed averaged 2.72 percent (0.6 point), up from 2.66 percent. Bankrate's weekly survey revealed even smaller changes: The 30-year fixed dropped to 3.61 percent from 3.62 percent last week, while the 15-year fixed slid to 2.90 percent from 2.91 percent before.

From the second quarter to the third quarter of this year, 62 percent of metropolitan areas with a population of 200,000 or more saw a decrease in foreclosure activity, or 134 out of 212 metro areas. Year-over-year, foreclosure activity was down in 131 out of 212 metro areas, representing 62 percent of the metros tracked. RealtyTrac VP Daren Blomquist explained the decrease indicates ""most of the nation's housing markets are past the worst of the foreclosure problem.""

The Pending Home Sales Index (PHSI) rose ever so slightly in September, the National Association of Realtors reported Thursday, tempering the much-heralded housing sector revival. The index inched up to 99.5, an improvement of 0.3 percentage points over August's 99.2. Economists had expected the index to jump 2.5 percent to 101.7. The NAR noted though the PHSI was up 14.5 percent since September 2011, the 17th straight month of year-over-year increases.

First-time claims for unemployment insurance fell 23,000 to 369,000 for the week ended October 20, the Labor Department reported Thursday. Economists expected initial claims to fall to 372,000. The previous week's report was revised upward to 392,000 first-time claims--the highest level since mid-June--from the originally reported 388,000.

The Federal Housing Finance Agency's (FHFA) House Price Index (HPI) continued its upward crawl in August, rising 0.7 percent from July, according to a release from the agency. For the 12 months ending in August, home prices in the United States rose 4.7 percent. The August index is down 15.9 percent from its peak in April 2007 and is at roughly the same level as June 2004's index.

New home sales jumped 5.7 percent in September to a seasonally adjusted average annualized rate of 389,000, the highest rate since April 2010, the Census Bureau and HUD reported Wednesday. The month-to-month sales improvement was the strongest since February, when sales improved 27,000, or 8.0 percent. While sales numbers improved, both the median and average sales price of a new home dropped month-to-month. Sales were still up 27.1 percent from September 2011, the strongest year-over-year gain since February.