All the Real Estate News That’s Fit to RE-Print™
Welcome to our weekly edition of Real Estate Investing News This Week. Highlights this week include:
- Home Prices Continue to Rise
- New Home Sales Rise 7.8%
- Home Price Appreciation Slows in 65% of Major Metros
According to the S&P/Case-Shiller Home Price Indices, home prices continued their rise across the country over the last 12 months.
However, monthly data reveal slowing increases and seasonal weakness.
Both the 10-City and 20-City Composites saw year-over-year increases in January compared to December. The 10-City Composite gained 4.4% year-over-year, up from 4.3% in December. The 20- City Composite gained 4.6% year-over-year, compared to a 4.4% increase in December.
The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.5% annual gain in January 2015 versus a 4.6% increase in December 2014.
“The combination of low interest rates and strong consumer confidence based on solid job growth, cheap oil and low inflation continue to support further increases in home prices” says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices.
“Despite price gains, the housing market faces some difficulties. Home prices are rising roughly twice as fast as wages, putting pressure on potential homebuyers and heightening the risk that any uptick in interest rates could be a major setback. Moreover, the new home sector is weak; residential construction is still below its pre-crisis peak.
Any time before 2008 that housing starts were as low as the current rate of one million, the economy was in a recession.”
Sales of newly built, single-family homes rose 7.8 percent in February to a seasonally adjusted annual rate of 539,000 units, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
This is the highest sales pace since February 2008.
“Today’s numbers are a great start to the spring buying season,” said Tom Woods, chairman of the National Association of Home Builders (NAHB). “Hopefully, this is an indicator of how the rest of the year will fare.”
Distressed sales (REO and short sales) accounted for 14 percent of total home sales nationally in January 2015, a 3.1 percentage point drop from January 2014.
REO sales made up 9.9 percent of total home sales in January 2015 and short sales made up 4.1 percent.
According to RealtyTrac‘s February 2015 Home Price Appreciation Analysis, annual home price appreciation in February slowed compared to annual home price appreciation a year ago in 60 of the 92 metros analyzed.
Home price appreciation slows in 65 percent of metros
Among the nation’s largest metro areas, those with slowing home price appreciation included New York, New York (annual appreciation of 3 percent compared to 6 percent last year), Los Angeles, California (annual appreciation of 9 percent compared to 20 percent last year), Chicago, Illinois (annual appreciation of 6 percent compared to 16 percent last year), Washington DC (annual appreciation of 6 percent compared to 7 percent last year), and Miami, Florida (annual appreciation of 10 percent compared to 20 percent last year).
Markets with accelerating home price appreciation
Home price appreciation accelerated in 32 of the 92 (35 percent) metro areas nationwide.
Markets with the fastest-accelerating appreciation included Houston, Texas (21 percent annual appreciation this year compared to 5 percent annual depreciation last year), Austin, Texas (16 percent annual appreciation this year compared to 9 percent last year), Augusta, Georgia (15 percent annual appreciation this year compared to 6 percent last year) and Greensboro, North Carolina (14 percent annual appreciation compared to no appreciation last year).