According to FNC’s Residential Price Index™ (RPI), U.S. home prices continued to rise at a brisk pace in March and up 0.9 percent nationwide.
March’s increase follows a strong momentum in February that recorded some of the largest unseasonable gains in many of the nation’s key housing markets. With continued low interest rates and easing credits, particularly recently launched low-down-payment conventional loans by Fannie Mae and Freddie, home prices are positioned for strong gains. This spring/summer home buying season already appears well under way across the West, South, and Midwest regions.
The latest development in the for-sale market shows the pace of home sales has picked up rapidly since March. The median time-on-market is down from 128 days in March to 106 days in April, the fastest seasonal pace for the month of April since the housing market began to recover in early 2012. The average asking-price discount is 3.3 percent, down from 4.2 percent in March.
Completed foreclosures in March comprise about 13.7 percent of total existing home sales, down by two percentage points from February’s 15.8 percent.
FNC’s RPI is the mortgage industry’s first hedonic price index built on a comprehensive database that blends public records of residential sales prices with real-time appraisals of property and neighborhood attributes. As a gauge of underlying home values, the RPI excludes final sales of REO and foreclosed homes, which are frequently sold with large price discounts, likely reflecting poor property conditions.
The attached table shows seasonally unadjusted month-over-month (MOM) and year-over-year (YOY) changes in three composite indices. The national index is based on recorded sales of non-distressed properties (existing and new homes) in the 100 largest metropolitan areas. Both the national and 30-MSA composite indices were up at a seasonally unadjusted rate of 0.9 percent. After a relatively steep gain in February, the 10-MSA composite moderated slightly during the month and was up 0.6 percent. Quarterly performance across the indices was dragged lower by a weak January, registering a small gain of about a half percentage point. Average home price appreciation ticked up slightly but remained in the 4.5-5.0 percent range nationwide.
The attached chart tabulates the latest MOM and YOY price trends for each MSA in the FNC 30-MSA composite index. Home prices are up in all MSAs except San Antonio, Baltimore, and New York. Of the 27 up-markets, 21 cities recorded more than a 1 percent MOM increase in March, led by Tampa, Nashville and Chicago at 3.4 percent, 3.2 percent, and 2.8 percent, respectively. For Chicago, Portland, Riverside, CA and Sacramento, March marks a second consecutive month of strong price momentum. Other cities that appear off to a strong start of the spring home buying season include Atlanta, Cincinnati, Dallas and Minneapolis.
While most of the nation’s housing markets have gained momentum, New York, San Antonio and Baltimore continue to show weakening prices as of March, down 1.6 percent, 0.3 percent, and 0.5 percent, respectively. Baltimore’s foreclosure sales have climbed rapidly in recent months, largely contributing to its continued price weakness. Foreclosure sales in New York also appear to be at three-year highs.
As of March, the fastest YOY growth markets are Las Vegas (13.1 percent), Riverside (12.0 percent), and Dallas (10.1 percent), which are followed by a number of other cities that also continue to enjoy robust appreciation: Los Angeles (9.6 percent), San Diego (9.4 percent), Orlando (9.4 percent), Miami (9.3 percent), Portland (9.2 percent), and Atlanta (8.7 percent).