Tag Archives: Home Prices

As prices rise, investors are having a harder time justifying housing market purchases, according to a recent Campbell/Inside Mortgage Finance HousingPulse Tracking survey. In May, the share of home purchases from investors fell to the lowest level in more than three years, dropping to 20.2 percent from 22 percent in April, according to the survey.

National home prices, along with the 20 largest states, posted positive monthly and yearly gains in April, according to Lender Processing Services (LPS). LPS' Home Price Index (HPI) found prices in April stood at $217,000, up by 1.5 percent from March and up 8.1 percent from a year ago. The national HPI is still 18.2 percent below its June 2006 peak, when the index averaged $265,000. For the second straight month, all 20 of the largest states tracked by LPS saw positive month-over-month growth.

The recent jump in home prices has led to speculation that the rapid surge in home prices could be the sign of a new housing bubble similar to the one that led to the Great Recession. Is it? The not-so-short answer is, not yet. An increase in prices itself does not signal a bubble. An unsustainable increase, not supported by other data, however, would. In the run-up to the 2006 collapse, the higher prices--which had been trending up for four years--led to a sharp uptick in construction wholly unsupported by demographics.

Home prices rose annually and monthly in May, according to Zillow. In fact, 29 of the 30 largest metropolitan areas covered by Zillow's Home Value Index experienced rising prices over the 12-month period ending in May, and 15 of the 30 posted double-digit increases. Zillow expects prices will continue their upward trajectory in the short-run with a 4.1 percent increase over the following 12 months. However, as inventory increases and interest rates rise, ""some demand may also ebb,"" said Stan Humphries, Zillow's chief economist.

While the level of search activity from international house hunters changed little year-over-year, Trulia found trends are changing among foreigners who shop for homes in the U.S. Among the home searches conducted on Trulia from April 2012 to March 2013, search activity from internationals accounted for 4.3 percent of all searches, down slightly from 4.4 percent a year ago.

Existing-home sales rose a solid 4.2 percent in May to an annual sales rate of 5.18 million, the highest level since November 2009, the National Association of Realtors reported Thursday. Economists had expected existing-home sales to hit 5.0 million. The median price of an existing home jumped $16,200 (8.4 percent) for the month and was up $27,700 (15.4 percent) from May 2012. The inventory of homes for sale rose to 2.22 million from 2.15 million in April.

Double-digit price increases in some markets hard-hit by the housing crisis prompt the question, are we experiencing another housing bubble? While several factors are combining to push prices up right now, CoreLogic analysts say we are not headed into anther bubble. During the bubble leading to the recent housing crisis, real home prices increased 62 percent. When the bubble burst, prices fell 47 percent, according to CoreLogic.

After staging a turnaround last year, the housing market is continuing on the road to stabilization in 2013, RE/MAX said in its National Housing Report for May. Of the 52 metros surveyed last month, 45 reported higher sales than May 2012, with 30 posting double-digit gains. For all homes sold in May, the median price was $185,000, a 4.2 percent gain over April and a 10.8 percent increase over May 2012. Reduced inventory continues to be a concern, however, though recent monthly changes have been promising.

The increase in mortgage rates coupled with rising home prices may dampen demand, but the recent upward movement in rates is not enough to make housing unaffordable to median income earners, according to Freddie Mac's economic and housing outlook for June. In fact, the GSE's analysis showed mortgage rates would have to climb to nearly 7 percent before a median priced home is no longer affordable to median income earners in most parts of the country.

The steady influx of out-of-state transplants, along with stronger than average employment growth, should keep the housing and apartment sectors in Texas strong, a report from the Dallas Federal Reserve concluded. Using data from the Census Bureau, the report authors D'Ann Petersen and Christina Daly pointed out that Texas is the No. 1 state for domestic in-migration. From July 2011 to July 2012, the Long Star state saw a net 140,888 new arrivals when excluding births or international migration.