Home Prices of Normal Sales Up 0.3% in December

The latest FNC Residential Price Index™ (RPI) shows U.S. home prices continue to rise. As of December, the RPI indicates the fastest year-over-year growth since the recovery began in early 2012. The index, constructed to gauge price movement among normal home sales exclusive of distressed properties, was up 0.3% in December—outperforming the overall price movement in the single-family housing market. Unlike overall price measures that include distressed sales (which recently have shown signs of weakening), home prices of normal sales have been rising at steady and sustainable levels—about 0.3-0.5% per month.

Based on recorded sales of normal, non-distressed properties (existing and new homes) in the 100 largest metropolitan areas, the FNC national composite index shows that, in December, home prices rose at a seasonally unadjusted rate of 0.3%, essentially maintaining the same pace achieved since September.

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Economist Sees Interest Rates Leveling Off Next Year

Last week Ken Fears, a leading housing economist predicted that recent increases in mortgage interest rates will level off next year and housing sales across the nation will remain strong. He said “We see prices continuing to rise and we expect rates to be about 5.1 percent maybe up to 5.25 percent.”

Mortgage rates have increased more than 1 percentage point since May, although Thursday, they dropped to 4.5 percent from last week’s 4.75 percent.

Meanwhile, sharply rising prices have pulled more homeowners out from underwater on their mortgages — where homes are worth less than what’s owed on them. That has led to declines in foreclosures and delinquencies, reducing the inventory on banks’ balance sheets and lowering the potential for a future wave of foreclosures.

Banks also have been more comfortable making loans to people buying more expensive houses than cheaper ones, presumably because they have stronger credit. Jumbo loans usually carry higher interest rates than conforming loans, but that pattern was reversed recently, Fears noted.

Fears says the NAR expects prices to continue to rise.

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JULY HOME PRICES SOAR

The housing market continues its march forward, as home prices nationwide increased by 12.4 percent year-over-year in July when compared to a year prior. This boost is the 17th consecutive monthly year-over-year boost, with prices up 1.8 percent between June and July 2013. Excluding distressed sales, home prices increased on a year-over-year basis by 11.4 percent in July 2013 compared to July 2012. On a month-over-month basis, excluding distressed sales, home prices increased 1.7 percent in July 2013 compared to June 2013. Distressed sales include short sales and real estate owned (REO) transactions.

What could be bringing more buyers into the fold?

Boomerang buyers who are currently renting because they had a short sale or foreclosure in the past 2-3 years but are now eligible to purchase again.

The fact that interest rates are going up a little creates a sense of urgency among buyers. Even though prices have increased 25 percent in the past 12 months, it’s still an affordable market. We’re in a recovering market, but if you wait another year or two, you might be kicking yourself.

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BUYERS WANT TO BUY BEFORE RATES GO UP!

AREN'T THEY PRETTY?

I love the cottages in New Orleans. Some features of this style of house are thought to be influences from places in France's former colonial empire. The front porches are believed to originate from the Caribbean islands. The high gabled roof is thought to be of French Canadian origin.

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BUYERS WANT TO BUY BEFORE RATES GO UP!

May Pending Home Sales Highest in Six Years - Buyers   Want to Buy before Rates Go Up!

Pending home sales rose in May to the highest level since late 2006, implying a possible spark as mortgage interest rates began to rise. Contract activity is at the strongest pace since December 2006 when it reached 112.8; pending sales have been above year-ago levels for the past 25 months.

Existing-home sales are projected to increase 8.5 to 9.0 percent, reaching about 5.07 million in 2013, the highest in seven years; it would be slightly above the 5.03 million totals recorded in 2007.
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DID YOU KNOW?

The Degas Historic Home, Courtyard, & Inn offers daily tours to give visitors a first hand look into Edgar Degas’ life in New Orleans. The tour includes exploring both houses, the surrounding Creole Neighborhood of Treme, and viewing the award-winning film “Degas in New Orleans, a Creole Sojourn”.