Oxford, MS (PRWEB) June 16, 2014
The latest FNC Residential Price Index™ (RPI) shows U.S. home prices continue to firm up moderately despite weaker-than-expected home sales in recent months. Constructed to gauge the price movement among normal home sales excluding distressed properties, the index rose 0.6% from March to April. In a sign that the annual rate of home price appreciation has peaked, the index’s year-over-year change has moderated for a second consecutive month since February.
Low interest rates and continued declines in home foreclosures contribute to the price gain amid weak housing activity and modest economic growth. As of May, foreclosure sales nationwide accounted for 12.2% of total home sales, down from 14.5% in April. The for-sale markets continue to see moderately rising asking prices and relatively fewer price markdowns, consistent with constrained inventory. May’s average asking price rose 2.3% and the month’s asking-price discount was 2.2%, down from April’s 2.4%.
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.
Based on recorded sales of non-distressed properties (existing and new homes) in the 100 largest metropolitan areas, the FNC national composite index shows that April home prices rose moderately at a seasonally unadjusted rate of 0.6%. Since February, home prices have been firming up at a steady rate of about a half percentage point. The two narrower indices (30- and 10-MSA composites) show a similar pace of price gain in the nation’s top housing markets. Their year-over-year trends also indicate that the annual rates of home price appreciation have moderated for a second consecutive month after reaching the peak in February.
Twenty-five component markets show a positive month-to-month change, led by Phoenix (1.7%), Charlotte (1.7%), and Sacramento (1.6%), and followed closely by nine other markets at more than 1.0% each. Although April’s gains are generally more subdued compared to March, fewer markets recorded price declines during April. In Denver in particular, after seven consecutive months of negative growth, the trend is finally reversed with prices up 1.0%.
With April’s year-over-year change exceeding 20%, Riverside, Calif., Sacramento, and Miami lead the chart in the annual rate of home price appreciation, followed by Orlando (19.7%), Las Vegas (18.3%), San Francisco (17.6%), and San Diego (17.1%). However, annual price accelerations have moderated across 20 component cities including the ones above. Meanwhile, the Cumulative Recovery numbers continue to show a widening gap across the nation more than two years into the recovery.