The growth rate in most of the nation’s top housing markets have slowed and a handful even turned negative.
Oxford, MS (PRWEB) November 13, 2014
The latest FNC Residential Price Index™ (RPI) shows home prices declined in September ─ ending the 30-month rising streak ─ despite strong home sales and continued labor-market improvement. Based on recorded sales of non-distressed properties (existing and new homes) in the 100 largest metropolitan areas, the index fell 0.3% between August and September. In the meantime, the annual rate of home price appreciation continued to level off, down to 6.3% in September. Throughout the third quarter, home prices were up 1.8% from the second quarter.
As of September, completed foreclosures comprise about 11.5% of total existing home sales, up slightly from the summer months. An expected increase in the pace of disposing distressed properties this winter could further dampen home prices. In the for-sale market, the past four months have seen gradual but steady rises in the average asking price discount and time-on-market (TOM). As of October, the median discount is 3.5% while the TOM is 99 days.
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.
Notably, the 10-MSA composite indicates home prices in the nation’s top housing markets experienced some of the largest price declines, down by 1.0%, led by San Francisco and Los Angeles . The index also received a moderate downward revision for its August level, resulting in only a 0.5% month-to-month increase in August as opposed to 1.1% reported previously. On a quarterly basis, the indices increased at a slower pace during the third quarter than during the second. The year-over-year rates continue to show growth decelerations.
The growth rate in most of the nation’s top housing markets have slowed and a handful even turned negative. Prices were up or relatively flat in 17 of the 30 cities tracked by the FNC index, down from 22 cities in August and 26 in July. The average price gain among the 17 up-markets was less than one percentage point (0.7%), compared to 1.2% in August.
Home prices in Atlanta, Minneapolis, and Dallas held up better, rising 2.5%, 1.7%, and 1.2%, respectively. On the downside, the Los Angeles metro area joined the Bay area to suffer a large monthly decline of 2.8%. This is the second consecutive month that Bay area home prices fell sharply, down another 2.6% following August’s 2.1% drop. Florida’s Tampa area also recorded a moderate decline of 1.6%. Despite housing’s continued growth moderation, the large disparity in the annual rate of price appreciation persists.