January Home Prices Rise 0.3 Percent
The latest FNC Residential Price Index® (RPI) indicates that
U.S. property values continued to recover through January—the 11th consecutive
month of rising prices. Despite the uneven pace of price gains across different
geographical markets, there are clear signs that the housing recovery is
A limited housing supply and declining
foreclosure sales are contributing to the recovery of underlying property
values. The average list-to-sale price ratio increased to 93.5 in January,
compared to 90.3 during the same period a year ago; in other words, the average
asking price discount dropped to 6.5 percent from 9.7 percent. Foreclosures, as
a percentage of total home sales, were 20.2 percent in January, down from 26.9
percent a year ago.
Based on recorded sales of non-distressed properties
(existing and new homes) in the 100 largest metropolitan areas, the FNC 100-MSA
composite index shows that January home prices rose 0.3 percent from the
previous month and were up 5.7 percent on a year-over-year basis from the same
period in 2012.] The 30-MSA and 10-MSA composite indices show similar trends of
rising prices, with the 10-MSA composite accelerating more rapidly at 0.8
percent month-over-month and 7.2 percent year-over-year.
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 sales of foreclosed homes, which are frequently sold with large
price discounts, reflecting poor property conditions.
Seventeen of the
component markets tracked by the FNC 30-MSA composite index show higher prices
in January. The strong price momentum continues in Phoenix and Las Vegas where
prices were up 1.9 percent and 1.5 percent in January after rising 2.1 percent
and 2.0 percent, respectively, in December.
Year-over-year, the two
cities saw prices rise 28.6 percent and 12.5 percent. The January price declines
seen in the other 13 markets are largely attributable to seasonal fluctuations.
Home prices have bottomed out in these markets. On a year-over-year basis, all
30 component markets show higher prices from a year ago, but it is clear that
the degree of market improvement remains inconsistent
Although home prices have improved significantly in the last
12 months, a six-year price comparison shows that current prices remain well
below their near-peak levels. On average, today’s home prices are about 27.5
percent below January 2007. In hard-hit markets such as Las Vegas, Orlando,
Miami, and Riverside, Calif., home prices are only half of what they were six