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Home sales and home prices - Updates
A collection of articles on Home Prices and Home Sales related to the the U.S. market. Here you can read short updates from 2010 and going forward.
Slower Price Gains Seen as Good Sign
Submitted on February 4, 2014
U.S. home prices won't return to pre-crash levels for another seven years, but that may not be such a bad thing.
That's according to a new analysis by the real estate data firm Clear Capital, which says current home price increases are in line with long-term averages. It describes that situation as healthy for the industry overall, even though it means some mortgages will remain underwater for some time to come.
National home prices are presently increasing at a rate of about 1.2 percent a quarter, according to Clear Capital's January market report, which puts them the historic range of 3-5 percent a year. At that pace, prices won't return to their 2006 peak, adjusted for inflation, until 2021.
Stability seen as more important than price rebound
Although that's bad news for borrowers who paid more for their homes than they're currently worth, the more important thing is that the housing market is showing moderate growth typical of its long-term patterns, without any signs of a new bubble in the offing, according to Dr. Alex Villacorta, Clear Capital's vice president of research and analytics.
"With the majority of metro markets still so far below peak prices, it's time for conversations surrounding price trends to shift away from the 2006 peak as the point of reference, and back to current trends and forecasts," Villacorta said. "While there are certainly investors and homeowners holding real estate assets that will be underwater for seven years or more, the current housing market is positioned to behave very similar or even below historical norms, given the current economic climate."
Half still below 2000 price levels
Clear Capital's analysis shows that, in inflation-adjusted terms, 46 out of the 50 major metropolitan markets analyzed have home prices that remain at or below 2003 levels, while half are below their 2000 levels.
Although many metro areas recorded double-digit price increases over the past year, particularly ones where prices had been severely depressed following the crash, those gains have moderated in recent months, leading Clear Capital to conclude there are few signs of a new housing bubble in the offing.
Duke: Housing Should Lift Economy
Submitted on February 5, 2013
A recovering housing market should help drive a continued economic expansion in the year ahead, despite the U.S. economy showing signs of weakness in recent months, according to Elizabeth Duke, a member of the Federal Reserve Board of Governors.
"I'm actually on the optimistic side," Duke said, during a question and answer session following a speech in Duluth, Ga. "I think there is some momentum building, particularly in the area of housing."
Duke pointed to factors such as steady increases in home prices, along with rising demand for new home construction as encouraging signs for the economy. Housing has typically been a key factor in bringing the U.S. out of recessions, with the most recent downturn the notable exception to date.
Sees slowdown as temporary
Recent data from the Census Bureau shows the U.S. economy shrank by 0.1 percent in the fourth quarter of 2012, the first decline in over three years. Many analysts attribute that to uncertainty arising from the standoff over the fiscal cliff, which led to reduced federal spending, particularly by the military, as well as to businesses reducing their inventories.
However, Duke noted that other trends continued to show signs of strengthening, including increased consumer spending and easing of restrictions on credit, particularly on auto loans.
"The question really is how much of that momentum in housing, which I expect to continue, will spill over into better consumer confidence, better business confidence," she said.
Strongest home price gains in six years
New figures released today by the real estate data firm CoreLogic show that U.S. home prices posted their biggest annual gain in over six years as of December, rising 8.3 percent over the previous 12 months. That was the biggest annual increase reported since May 2006, while the 0.4 percent gain from November marked the 10th consecutive monthly increase.
The company is predicting a 7.9 percent increase in overall U.S. home prices in 2013.
The Federal Reserve has been trying to kickstart the economy since early 2009 through a series of moves that have sent mortgage rates on a downward spiral of ever-new record lows, as well as reducing the cost of other credit as well. The moves have driven strong demand for mortgage refinancing, as homeowners sought to take advantage of falling rates, but so far has resulted in only a modest recovery in home purchasing.
Duke is one of seven members of the Federal Reserve Board of Governors, having been appointed in 2008 by then-President George W. Bush.
Slower Home Price Gains Expected
Submitted on January 8, 2013
U.S. home prices are predicted to keep rising in 2013, though at a considerably slower pace than the year just completed.
A modest annual gain of 2.1 percent is predicted for the year, according to estimates released today by the real estate data firm Clear Capital That's down from an increase of 4.9 percent in 2012, a figure driven by strong gains in the latter part of the year.
Clear Capital projects a slowdown in part because prices this year are starting off at a higher level than in 2012, which benefited in part due to a rebound effect of prices coming off market lows. The increases may see some potential buyers getting priced out of the market this year, according to the company's analysis.
Fiscal cliff could have an impact
"Overall the housing recovery still shows evidence of pushing ahead, as indicated by our December home price trends and 2013 forecasts," said Dr. Alex Villacorta, Clear Capital director of research. He added "The housing landscape, however, could quickly shift should the broader economy tumble back into recessionary territory."
Villacorta said it was unclear whether residual effects of the fiscal cliff might negatively affect the housing market, either through a decrease in consumer buying power or by simply affecting consumer's perceptions. At the same time, he said the past year's gains suggest that home prices will have some resiliency.
The Western region saw the strongest price gains by far over the past year, with prices up 11.8 percent over the 12 months ending in December. More modest annual gains were seen in the South and Midwest, up 4.0 and 3.0 percent, respectively, while annual price gains in the Northeast were a relatively sluggish 1.5 percent.
Seattle expected to be tops in 2013
The nation's hottest housing market in 2013 is expected to be Seattle, where a strong housing recovery is already underway and Clear Capital predicts annual price gains of 13.5 percent over the next 12 months, owing in large part to robust employment there. Birmingham, Ala., is expected to see a 10 percent gain, while Bakersfield and Fresno, Calif., and Minneapolis are all expected to see annual price increases greater than 7 percent.
Only eight of the nation's 50 largest metropolitan areas are expected to see declines in housing prices, led by St. Louis with a predicted decline of 1.7 percent. The Chicago and Baltimore regions are also expected to see 12 month price declines of more than 1 percent.
Home Prices Continue to Rise
Submitted on January 23, 2013
U.S. home prices continue to rise, increasing a seasonally adjusted 0.6 percent in November, according to today's figures from the Federal Housing Finance Agency (FHFA).
It's been nearly two years since monthly home prices have seen a decline, a stretch dating back to January 2011. Home prices for the 12-monthly period ending in November were up at an annual rate of 5.6 percent, while October's monthly price increase was adjusted to 0.6 percent, up from 0.5 percent originally reported.
Overall, U.S. home values remain 15.2 percent below their April 2007 peak and as of November were at roughly the same level as in August 2004.
Western states dominate gains
The West continues to be the nation's hottest region for housing prices by far, while Eastern states tend to lag behind. Of the nine U.S. Census Divisions, the Mountain and Pacific states are showing the most rapid price gains, both on a monthly an annual basis.
States in the Mountain Division showed the greatest price gains, with a 2.1 percent increase in November and 14.8 percent annual gain over the previous 12 months. The Pacific region saw gains of 1.7 percent and 11.1 percent, respectively.
The Middle Atlantic states are the nation's softest housing market, with home values showing only a 0.5 percent gain over the previous 12 months, followed by New England with a 0.9 percent increase. Those regions showed monthly increases in November of 0.4 percent and 0.8 percent, respectively.
Rust Belt, Old South see monthly declines
Two regions saw price declines in November, with the East North Central and East South Central down 1.0 percent and 0.4 percent for the month. On an annual basis, those regions saw price gains of 2.3 percent and 2.9 percent, respectively.
The South Atlantic states were the exception to the generally slow price increases east of the Mississippi River, with an annual gain of 7.0 percent, third highest in the nation, and monthly increase of 0.9 percent.
The remaining two districts, West South Central and West North Central, saw annual increases of 5.4 percent and 3.8 percent, and November gains of 0.6 percent and 0.4 percent, respectively.
Tight Inventory Boosting Home Prices
Submitted on February 21, 2013
Existing home sales showed a slight improvement in January, while a shrinking inventory and growing buyer traffic raised the possibility of higher prices this spring. January existing home sales were at a seasonally adjusted annual rate of 4.92 million, the National Association of Realtors (NAR) reported today, a 0.4 percent increase from December's downwardly adjusted rate of 4.90 million.
On an annual basis, sales were up 9.1 percent from their January 2012 level of 4.51 million. The median sales price of a previously owned home purchased in January was $173,600, reflecting a 12.3 percent annual increase from the $154,600 figure of January 2012. Meanwhile, the inventory of homes available for sale continued to shrink, to 1.74 million units, reflecting a 4.2 month supply and a decline of one-quarter from the level of one year ago.
Tight inventory could boost prices "Buyer traffic is continuing to pick up, while seller traffic is holding steady," said Lawrence Yun, NAR chief economist. "In fact, buyer traffic is 40 percent above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We've transitioned into a seller's market in much of the country." Yun said some seasonal increase in inventory is expected this spring, but it may not be enough to avoid faster-than-normal price increases as multiple buyers compete for the same properties.
First-time homebuyers made up 30 percent of all purchases in January, down slightly from 30 percent one year ago. Investors made up 19 percent of purchases, down from 23 percent in January 2012.
Condos outpace single-family homes Condominium and co-op sales have been rising slightly faster than sales of single-family homes. Sales of existing condos and co-ops were up 1.8 percent in January, to an adjusted annual pace of 580,000 and a 13.7 percent increase over the annual rate of 510,000 units in January 2012. Meanwhile, existing single-family home sales were up only 0.2 percent in January, to an annual rate of 4.34 million, and an 8.5 percent gain over the January 2012 seasonally adjusted rate of 4.00 million units.
Down Payments Getting Smaller
Submitted on June 04, 2013
It's getting easier to buy a home, with down payments required for home purchases shrinking by nearly 10 percent over the past two years. U.S. homebuyers posted an average down payment of 16.1 percent when purchasing a home with a 30-year mortgage in May, according to a new study released this week.
Although that's considerably higher than during the years of the housing bubble, when easy credit was common, it still represents a 9.4 percent drop since May 2011, when the average down payment was 17.6 percent. "As the housing market begins to improve, lenders are beginning to loosen their guidelines to more normalized standards and approve loans with lower down payments," said Doug Lebda, CEO of LendingTree, which produced the study.
"Although a good credit score is still important to have, borrowers may have an easier time qualifying for loans after years of tight guidelines, especially as home prices rise and we see fewer homeowners underwater." Higher prices = larger down payments New Jersey had the nation's highest down payments, with borrowers putting up an average of 20.5 percent on mortgages averaging $280,000. Closely behind were California and New York state, where down payments averaged 19.1 percent and 19.0 percent, respectively, on loan values of roughly $282,000 and $264,000.
The nation's smallest down payments were in Mississippi, where home buyers put up an average 11.9 percent down payment on mortgages averaging $186,000.
That was followed closely by West Virginia, where down payments averaged 12.0 percent on average loans of $171,000, and Alabama, where the figures were 12.4 percent and 198,000. Generally speaking, states with the largest down payments, percentage-wise, tended to be those with higher property values, while the smallest down payments tended to be in states where home prices are considerably lower.
The reasons for that were not addressed in the survey, but possible explanations include borrowers in higher-income states being better able to afford a large down payment (and thereby obtain better rates and avoid the cost of mortgage insurance).
Trulia: Home Prices Still Undervalued
Submitted on August 14, 2013
Home values across the United States remain undervalued by about 5 percent, despite a significant increase over the past year, according to a new analysis by the online real estate service Trulia.
The report throws cold water on concerns among some analysts that double-digit price gains over the past year suggest that a new housing bubble could be developing, but instead suggests the housing market still has a ways to go before reaching what might be considered normal values.
Price increases slowing down
In fact, price gains are actually cooling off, according to Trulia Chief Economist Jed Kolko, who noted reduction in asking prices in July on top of a slower gains on a quarterly basis.
"Nationally, home prices have started to slow down even though they haven't yet become overvalued," Kolko wrote in the company's monthly Bubble Watch. "Even though prices look less undervalued than last quarter or last year, the price slowdown means our chances of avoiding the next housing bubble just got better."
Prices in the third quarter of 2013 are up 11 percent over those of one year, according to Trulia figures. The company estimates that home prices nationally were overpriced by as much as 39 percent at the peak of the bubble in early 2006, and were undervalued by as much as 15 percent at the depth of the housing crash in late 2011.
California, Texas lead list of hot markets
Nationally, the housing picture remains a mixed bag, with prices calculated as overvalued in 19 of the 100 largest housing markets. Many of the most overvalued markets are in California, led by Orange County and Los Angeles, which saw price gains of more than 20 percent over the past four quarters and where prices are estimated to be overvalued by 10 percent or more relative to market fundamentals. Oakland, San Jose and San Francisco also saw large annual price gains.
Several of the other most overpriced markets were in Texas, where Austin, Houston, San Antonio and Dallas all saw double-digit price increases over the past year.
Florida, Ohio undervalued
Florida and Ohio led the list of most undervalued markets, each with four major cities in the top 10, with prices undervalued from 16-20 percent, although the Melbourne, Lakeland, Jacksonville, Fort Myers, Cleveland, Akron, Toledo and Dayton metro areas all saw annual price gains over the past four quarters.
The 10 most undervalued was rounded out by Las Vegas and Detroit, despite seeing some of the biggest annual price gains of 33 percent and 22 percent, respectively.
Home Prices Keep Strenghtening
Submitted on August 27, 2013
U.S. home prices continue to strengthen, with prices rising from May to June in all 50 states and major metropolitan areas, according to new pricing information from Lender Processing Services (LPS).
Nationally, home prices were up 1.2 percent in June from the previous month and posted an 8.4 percent annual gain from June 2012. The biggest monthly gains were among three of the states whose housing markets were hit hardest by the downturn, led by Nevada with a 2.4 percent increase, followed by Florida and California with 1.7 and 1.6 percent monthly gains, respectively.
Arizona, also one of the four hardest-hit states during the downturn, was in the top 10 with a 1.2 percent monthly gain.
The weakest monthly gain of all 50 states was seen in Nebraska, which still posted a respectable 0.4 percent increase.
Annual price gains were seen in the 20 largest states and all of the 40 largest metropolitan areas. California, Arizona, Florida and Georgia have seen double-digit price gains since June 2012, with California showing an impressive 19.6 percent increase.
Eighteen of the 40 largest metros showed double-digit gains over the past 12 month, with Las Vegas, San Francisco, Sacramento and San Jose all posting annual price gains of more than 20 percent.
Some actually at all-time highs
Prices in most of the nation continue to lag well below their pre-crash highs, although some have seen strong comebacks. Current home values are actually at all-time highs in both Texas and Colorado, according to LPS, and specifically in the markets of Dallas, Austin, Houston and Denver.
Other markets remain far below their pre-crash highs despite recent strong gains. Florida home values are still 36.5 percent below their pre-crash high, Arizona values are still down by 32.8 percent and overall California values remain down by 26.3 percent, though individual metro areas may be doing much better.
Home Sales Up Despite Sandy
November 12, 2012
Existing home sales edged up in October, rising a seasonally adjusted 2.1 percent despite limited impacts from Hurricane Sandy.
The National Association of Realtors (NAR) reported today that existing home sales in October were at an annual pace of 4.79 million, up from a downwardly revised 4.69 million in September. A figure of 5 million is generally considered to be the lower end of a healthy housing market.
Compared to one year ago, October's sales represented a 10.9 percent increase over their Oct. 2011 level of 4.32 million.
Storm impacts not fully felt
Home sales were up in every part of the nation except the Northeast, which recorded a 1.7 percent decline. However, the impact of the storm was relatively minor, according to NAR chief economist Lawrence Yun, who said that most transactions for the month were already completed by the time the storm hit.
Yun said more substantial impacts from Hurricane Sandy were expected in the Northeast housing markets in the coming months, with sales delayed in many storm-affected regions.
In other regions of the country, existing home sales were up 4.4 percent in the West, 2.1 percent in the South and 1.8 percent in the Midwest for the month of October. On an annual basis, the Midwest is showing the strongest gains, with home sales up 18.1 percent from Oct. 2011, while in the weakest annual gains are seen in the West, where sales have increased only 3.5 percent over the past 12 months.
Prices up 8 months straight
Meanwhile, the median sales price for existing homes of all types rose for the eighth consecutive month, to $178,600. That's the longest streak of consecutive monthly increases since 2005-06 and represents an 11.1 percent annual increase from Oct. 2011.
That rise in home prices is benefiting underwater homeowners, according to Yun.
"Rising home prices have already resulted in a $760 billion growth in home equity during the past year," Yun said. "Given that each percentage point of price appreciation translates into an additional $190 billion in home equity, we could see close to a $1 trillion gain next year."
Distressed homes one in four sales
Just under one-quarter of all home sales were distressed properties, equally divided between foreclosures and short sales. According to NAR figures, foreclosures sold at an average discount of 20 percent compared to a normal transaction, while short sales sold at a 14 percent discount.
The inventory of homes for sale has been shrinking and currently stands at 2.14 million units, which represents a 5.4 month supply at current sales rates.
Zillow: Home Prices Have Bottomed
Submitted on July 24, 2012
U.S. home values appear to have bottomed out, posting their first annual increase in five years, according to the newest Zillow market report, released today.
Overall home values were up by 0.2 percent in the second quarter of the year compared to the second quarter of 2011, the first annual gain in Zillow's Home Value Index since 2007. Home prices in the index have now increased for four consecutive months and stand at a median price of $149,300.
"After four months with rising home values and increasingly positive forecast data, it seems clear that the country has hit a bottom in home values," said Stan Humphries, Zillow chief economist. "The housing recovery is holding together despite lower-than-expected job growth, indicating that it has some organic strength of its own."
Recent gains "robust"
Despite what the Zillow report described as "robust" price increases over the past four months, concluding with a 0.7 percent rise in June, the company does not expect that trend can be maintained. Zillow's forecast calls for prices to taper off over the coming months and for the 2012 to end with a 1.1 percent price gain overall.
The strongest annual gains were seen in the Phoenix, Ariz. metropolitan area, where prices posted a 12.1 percent rise since the second quarter of 2011, an increase Zillow attributes to high demand from investors looking for rental properties, traditional homebuyers attracted by bargain prices and mortgage rates, and supply restrictions due to homeowners who are unable to put their homes up for sale due to being underwater on their mortgages.
National housing picture still unsettled
Nationally, the housing market remains mixed however, with only 53 of the 167 metropolitan areas studied showing annual gains in the current Zillow survey. Zillow predicts that about 40 percent will see price increases, led by the Phoenix and the Miami, Fla. markets, both of which were hard-hit in the housing downturn.
The Zillow report is only the latest to see an upturn in the U.S. housing market. The Federal Housing Finance Agency (FHFA) reported today that U.S. home prices rose a seasonally adjusted 0.8 percent from April to May, and posted an annual increase of 3.7 percent from May 2011 to May 2012.
The FHFA figures are based on based on sales prices for homes purchased with conforming mortgages guaranteed by Fannie Mae or Freddie Mac; the Zillow survey is based on data from public records in the metropolitan areas studied.
Long Recovery Seen for Home Prices
Submitted on July 27, 2011
U.S. home prices will likely take eight to ten years to recover to their precrash levels, if past history is any guide, with significant implications for the overall economy as well.
That's according to a new report on U.S. housing and mortgage trends from the financial and business analysis firm CoreLogic. Among other things, it suggests that consumer spending, which makes up two-thirds of the economy, will continue to be constrained as long as home prices remain depressed.
The report notes the current downturn and gradual stabilization of home prices is following a similar track to some of the worst regional housing price declines from the late 20th century. Those downturns took from six to eight years for home prices to recover to previous levels. Given that the current price decline is deeper than those were, the report projects an eight to ten year recovery if the downturn continues to follow the earlier patterns.
Such a slow recovery means price increases will likely do little to help those in negative equity on their mortgages, the report concludes, even though falling home values put them in that position to begin with. It notes that approximately one-quarter of homeowners with mortgages are currently underwater, with an average deficit of $65,000. But the long time line expected for home prices to recover means that foreclosures and gradual amortization of loans will do more to reduce negative equity than rising prices will, the report says.
The report notes that the collapse in home prices has eliminated more than half of the equity U.S. homeowners once held. From a high of $13.5 trillion in reached in the first quarter of 2006, total home equity in the United States has fallen to a mere $6.1 trillion by recent estimates. This has been a driving factor in foreclosures, since financially pressed homeowners who retain at least some equity in their home are likely to sell before the bank can repossess the property.
For the overall economy though, the lack of home equity will likely remain a drag for some time to come. Home equity, the report notes, has traditionally accounted for the majority of a typical household's net worth and is used to support both household consumption and purchases of durable goods.
The report notes that retail spending is strongly correlated with home prices, and that homeowners account for three-quarters of retail spending. That suggests that retail spending, and the overall economy, will remain sluggish as long as home prices remain depressed.
Home Values Drop $1.7 Trillion
Submitted on December 9, 2010
U.S. home values fell even more in 2010 than they did last year, with an expected $1.7 trillion total decline by year's end, according to figures released today by the real estate data company Zillow.
That represents a 5 percent decline in total home values over the year, with the total market now estimated at $22.7 million. Zillow reports that home values have declined by more than $9 trillion since the peak of the housing market in 2006.
The 2010 decline is 63 percent more than the approximately $1trillion loss in home values registered in 2009. Much of that decline occurred in the second half of 2010, with values falling by $1 trillion from July to December.
"Despite a strong start to 2010, by the end of the year homes lost more of their value in 2010 than they did in 2009," said Stan Humphries, Zillow chief economist. "Government interventions like the homebuyer tax credit helped buoy the market during the second half of 2009 and the first half of 2010, but we saw a renewed downturn in the last half of this year."
"Unfortunately, with foreclosures near an all-time high in late 2010 and high rates of negative equity persisting, it does not appear that the first part of 2011 will bring much relief," he added.
The big drop in home values produced a relatively modest increase in underwater homeowners, with the share of borrowers in negative equity rising to 23.2 percent of all mortgage holders in the third quarter of the year, up from 21.8 percent at the end of 2009. Negative equity refers to borrowers who owe more on their mortgages than their property is worth.
Less than one-quarter of the 129 housing markets tracked by Zillow showed price gains in 2010. Among the 20 largest home markets, California cities outperformed the nation as a whole, with San Diego showing a 2.3 percent annual gain and Los Angeles up 0.8 percent. Home values in San Francisco fell by 0.6 percent for the year, but that still outperformed most other major markets.
Major housing markets that were hit hard in the original downturn and ensuing foreclosure crisis got slammed again in 2010, with big declines in Florida, Arizona and Michigan markets. Home values in the Miami and Tampa markets were down 15.4 percent and 9.6 percent, respectively, while the Detroit metropolitan market declined another 13.9 percent for the year, while the Phoenix area posted a 13 percent decline.
Big declines were also posted in 2010 by a number of metropolitan areas that had avoided the worst of the initial downturn. Atlanta posted a whopping 14.6 percent decline in 2010, while home values in the Seattle area fell by 11.6 percent and Minneapolis-St. Paul was down by 8.8 percent.
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