In a sign that the U.S. housing market is on track for a strong spring/summer buying season, home prices continue to show solid gains in May, according to the latest FNC Residential Price Index™ (RPI). Prices across the country climbed 1.2 percent following an upwardly-revised April, which saw the largest March-to-April seasonal gain since 2005.
With homes selling at rapid pace, supply in many local markets remains relatively challenged amid rising sales. "While the participation of first-time home buyers has reportedly reached record highs, rising demand from potential trade-up buyers has also contributed importantly to the price growth in many markets,” says Bob Dorsey, FNC's chief data and analytics officer. "Trade-up buyers continue to capture moderate to modest gains on their investment; in May 2015, realized home price appreciation, measured at an annualized rate, averages 2.6 percent across the country."
Foreclosure sales have dropped to their lowest levels since October 2007. In May 2015, completed final sales of foreclosed and REO properties comprised about 10.3 percent of total existing home sales, a decline of nearly two percentage points from April's 12.2 percent.
Average time-on-market drops rapidly, down to 85 days in June, compared to 96 days in May. Meanwhile, sellers are taking smaller cuts off their asking price, averaging 3.1 percent in May, compared to April's 3.6 percent. Preliminary June estimates show a continued drop in the asking price discount nationwide, with buyers in the San Francisco market bidding up prices to pay an average of 4.8 percent above the listing price.