Tag Archives: Home Prices

With the increase in home and equity prices, Capital Economics suggests net household wealth may be on its way to rising above pre-recession levels later this year, which will lead to a boost to GDP. In a recent report, the firm forecasts the S&P 500 equity price index will end 2013 close to the current level of 1,500 and expects home prices to rise in the neighborhood of 5 percent. In turn, the growth in household wealth, the analytics firms says, could lift GDP by around 0.7 percent.

In Fannie Mae's housing survey for January, consumers maintained their expectation for growth in home and rent prices and also expressed more optimism toward the economy. The January 2013 survey found 41 percent of consumers believe homes prices will rise in the next 12 months, down from 43 percent in December, but up from 30 percent a year ago. As prices continue to climb, more consumers also said now is a good time to sell. The percentage rose to 23 percent in January, up from 21 percent in December and 11 percent a year ago.

National home prices ended the year by posting their biggest annual gain since May 2006, and prices rose in December for the 10th consecutive month, CoreLogic reported Tuesday. The data provider's Home Price Index (HPI) registered a year-over-year increase of 8.3 percent in December when including distressed sales. From November to December, prices barely moved higher, increasing just 0.4 percent.

On a national level, January home prices increased 5.4 percent from a year ago, but fell flat on a quarterly basis after inching up by just 0.9 percent, Clear Capital reported. Out of the four regions, the West maintained its lead with yearly gains and quarterly gains of 12.9 percent and 2.1 percent, respectively. The remaining three regions all saw price increases of less than 1 percent quarter-over-quarter. Dr. Alex Villacorta, director of research and analytics at Clear Capital, explained the softened quarterly gains suggest ""the budding recovery is not immune to the slower winter season.""

The low supply of housing stock recently reported is giving Capital Economics reason to believe home price forecasts under 5 percent are actually conservative estimates. Realtors in December expected prices to rise by about 3.5 percent over the next year, while consumer estimates were more modest at 2.5 percent for the same time period, according to a monthly housing report from the firm. But, with the low supply of inventory, Capital Economics anticipates much bigger gains in the future.

Capital Economics expects home prices to increase about 5 percent over the year at a national level. However, housing markets across the nation are markedly different, and this 5 percent will not be a constant in all regions. At the two far ends of the spectrum, the Northeast and the West will experience far different market climates this year, according to Capital Economics. The Northeast is much more likely to see no price growth at all than anything close to the 5 percent national average this year, the analytics firm stated in a recent outlook.

While the national trend shows home prices are rising and the supply of foreclosures is shrinking, on a more microscopic level, there are still metros where investors can find foreclosures at steep discounts and in greater abundance. RealtyTrac compiled a list of the 20 best (and worst) metro areas to buy foreclosures in 2013. RealtyTrac ranked Palm Bay, Florida as the No. 1 metro for foreclosure purchases. From 2011 to 2012, the metro saw foreclosure activity increase 308 percent, and it has a 34 months' supply of foreclosure inventory. Five other Florida metros were represented on the top 20 list.

After experiencing a downturn, spending on home improvement may finally register an increase in 2012, with the market appearing to be ""poised for a solid rebound,"" according to a recent report from the Harvard Joint Center for Housing Studies. The Joint Center estimates spending on home improvement rose 9 percent in 2012 after falling in previous years. The study found that as the housing market improves, the homes that burdened the economy are now being renovated.

Following S&P's calculation of a 0.1 percent decrease in prices in November, according to the Case-Shiller 20-city composite, analysis on home price trends remained positive. ""[A]fter accounting for the normal slowdown in the housing market over the winter months, this actually looks like another 0.6 percent [month-over-month] gain,"" stated Capital Economics Tuesday. Similarly IHS Global Insight's Stephanie Karol noted both Case-Shiller indices, when seasonally adjusted, posted increases for the 10th consecutive month.

Despite seeing a month-over-month drop, the 10- and 20-city Case-Shiller Home Price Indexes registered their strongest year-over-year improvement in two and a half years on a non-seasonally adjusted basis, Standard & Poor's, which publishes the indexes, reported Tuesday. The 10-city index fell 0.2 percent, and the 20-city index dropped 0.1 percent from October to November. On an annual basis, however, the 10-city index was up 4.5 percent, and the 20-city index rose 5.5 percent.