FNC Residential Price Index: Home Prices up 0.6%

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The latest FNC Residential Price Index™ (RPI) shows U.S. home prices up another 0.6% from June to July.

FNC Residential Price Index

FNC Residential Price Index

As home prices continue to strengthen, mortgage defaults and foreclosure starts have fallen to record lows.

The latest FNC Residential Price Index™ (RPI) shows U.S. home prices up another 0.6% from June to July. The latest trend—as of July—marks a 29-month rising streak since 2012. Based on recorded sales of non-distressed properties (existing and new homes) in the 100 largest metropolitan areas, the index increased 7.4% from the same period in 2013 and continues to indicate a persistent slowdown in the year-to-year growth of home prices.

As home prices continue to strengthen, mortgage defaults and foreclosure starts have fallen to record lows. As of July, completed foreclosures comprise only 10.5% of total existing home sales. Conditions in the for-sale markets remain favorable with the average asking-price discount slightly above 2.0% and time-on-market a little over 90 days. Preliminary data on August and September’s for-sale transactions show minimal change in these two market liquidity metrics.

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 the seasonally unadjusted rates of month-to-month and year-to-year changes in the FNC national index, a 100-MSA composite index, as well as two narrower indices, 30- and 10-MSA composites. The three indices exhibit similar moderating price trends from May to July.

The attached chart shows the latest price trends for each MSA in the FNC Composite 30, tabulated separately based on month-to-month, year-to-year, and 2012-to-date cumulative price recovery.

Prices were up in most markets during the month. Tampa, Sacramento, Baltimore, and San Francisco showed the largest price increases at 2.0%, 1.8%, 1.6%, and 1.6%, respectively. Charlotte and Miami both recorded a more than 2% decline in July after a strong Spring market that saw prices up by 8.4% and 7.4% in the half of the year.

On a year-to-year basis, despite a persistent slowdown across much of the country in the annual rate of price appreciation, prices continue to rise at double digits. While nationally home prices rise at a rate of 7.4%, a third of the markets in the FNC Composite 30 have performed considerably below average, most notably St. Louis and Cincinnati. In St. Louis, the 3.0% decline in July marks the 11th consecutive month of year-to-year price depreciation. Home prices have declined at an average of 1.0% year to year since November 2013.

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Bill Dabney
FNC, Inc.
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