Home prices nationwide rise for eighth consecutive month

CoreLogic’s October CoreLogic HPI report shows home prices nationwide, including distressed sales, increased on a year-over-year basis by 6.3 percent in October 2012 compared with October 2011, representing the biggest increase since June 2006 and the eighth consecutive increase in home prices nationally on a year-over-year basis.

On a month-over-month basis, including distressed sales, home prices decreased by 0.2 percent in October 2012 compared with September 2012. Decreases in month-over-month home prices are expected as the housing market enters the offseason. The HPI analysis from CoreLogic shows that all but five states are experiencing year-over-year price gains.

Highlights as of October 2012:

• Including distressed sales, the five states with the highest home price appreciation were: Arizona, 21.3 percent; Hawaii, 13.2 percent; Idaho, 12.4 percent; Nevada, 12.4 percent; and North Dakota, 10.4 percent.
• Including distressed sales, the five states with the greatest home price depreciation were: Illinois, -2.7 percent; Delaware, -2.7 percent; Rhode Island, -0.6 percent; New Jersey, 0.6 percent; and Alabama, -0.3 percent.
• The five states with the largest peak-to-current declines, including distressed transactions, were Nevada, -53.5 percent; Florida, -44.5 percent; Arizona, -40.2 percent; California, -36.6 percent; and Michigan, -35.3 percent.

Freddie Mac releases December outlook

Freddie Mac recently released its U.S. Economic and Housing Market Outlook for December showing what some of the market features are expected to look like in 2013.

According to the outlook, long-term mortgage rates will remain near their record lows for the first half of 2013, then rise gradually during the second half of the year, but remain below 4 percent.

Property values are expected to continue to strengthen with most U.S. house price indexes likely rising by 2 to 3 percent in 2013.

Household formation should step up further to a net 1.20 to 1.25 million household increase in 2013 with housing starts up around the 1 million annualized pace by the fourth quarter.

Vacancy rates for both apartments and the single-family for-sale market could bring aggregate vacancy rates down to 2002-2003 levels as household formation outpaces new construction.

While the refinance boom will continue into early 2013, it will be less compared with 2012, so single-family mortgage originations are likely to decline by 15 percent conversely, expect multifamily lending to rise approximately 5 percent.

California's most affordable counties..

6 TAX FACTS - Home Sellers should know

Foreclosures fall in 62 percent of U.S. cities

NEW YORK (CNNMoney) -- Foreclosures fell in nearly two-thirds of the nation's largest metro areas during the third quarter, according to RealtyTrac Thursday.

With 62% of the nation's 212 largest markets seeing foreclosure activity shrink during the latest quarter, the ongoing decline is yet another sign that the housing market is starting to stabilize.

During September, foreclosure activity in 58% of the major metro markets had even dropped below September 2007 levels.

32% of homebuyers are first-timers

Nearly one in three homebuyers in September were first-timers to the housing market, reported the National Association of Realtors on Wednesday in its Realtors Confidence Index.

That's up from 31 percent recorded in August and down from the historical norm of 40 percent, based on research from the trade group. The share of first-time buyers peaked in 2009, when it was 50 percent.

Fast Facts

Calif. median home price: September 2012: $345,000 (Source: C.A.R.)
Calif. highest median home price by region/county September 2012: San Mateo, $779,000 (Source: C.A.R.)
Calif. lowest median home price by region/county September 2012: Madera, $120,000 (Source: C.A.R.) 

Calif. Pending Home Sales Index: August 2012: 118.9, up 2.7 percent from July's 115.8
 
Calif. Traditional Housing Affordability Index: Second quarter 2012: 51 percent (Source: C.A.R.)

Mortgage rates: Week ending 10/18/2012 30-yr. fixed: 3.37% fees/points: 0.7% 15-yr. fixed: 2.66 fees/points: 0.6% 1-yr. adjustable: 2.60% Fees/points: 0.4% (Source: Freddie Mac) 

New-home sales hit 2-year high

NEW YORK (CNNMoney) -- In another sign of a housing market recovery, new-home sales rose in September to the highest level in more than two years, according to a government report released Wednesday.

Sales sold at an annual rate of 389,000 homes in the month, according to the Census Bureau report, up 5.7% from the 368,000 sales pace in August. The last time sales were at this pace, in April 2010, they were being helped by a short-term home buyer's tax credit.

Mortgage rates are near record lows, pushed down by the Federal Reserve's decision to buy $40 billion in mortgages to spur greater economic growth. The low rates, coupled with years of weak home sales, have resulted in affordable housing prices. Recently, home prices have started to rise, which is attracting buyers who were waiting for prices to bottom out.

There has also been a drop in unemployment, a positive development for people looking for mortgage loans.

Foreclosures have fallen to a five-year low, reducing the supply of distressed homes available on the market.

When will the housing market be "corrected?"

The housing recovery in California is expected to continue through to 2013, but the market won't be "corrected" until as far off as 2017, according to the California Housing Market Forecast released by the CALIFORNIA ASSOCIATION OF REALTORS.

 

Making sense of the story

• Homes sales and prices are expected to keep rising, but lower-than-normal inventory levels and underwater mortgages are key hindrances to a faster recovery, according to Leslie Appleton-Young, chief economist with the CALIFORNIA ASSOCIATION OF REALTORS®.
  
    
• Home sales are forecasted to rise 1.3 percent to 530,000 units next year, based on the projected tally of 523,300 units this year. That's a slower growth than that of 2011 to 2012, which is roughly 5 percent.

• The momentum in prices also is expected to carry through to 2013, a result of pent-up demand for a limited housing supply. The median price could rise 5.7 percent to $335,000 in 2013. That's lower than the projected price growth from 2011 to 2012, an estimated 11 percent. The state has a 3.2 months' worth of housing inventory, significantly lower than the 16 months'-plus supply of saw roughly four years ago.

• “Pent-up demand from first-time buyers will compete with investors and all-cash offers on lower-priced properties, while multiple offers and aggressive bidding will continue to be the norm in mid- to upper-price range homes,” said Appleton-Young in the report.

• Appleton-Young says what underwater borrowers throughout the state will do -- be it selling or holding -- will have a big effect on next year's housing recovery.

• Other things to watch next year that will have a bearing on the housing market include: policies related to the state,local and federal governments; and housing and monetary policies, Appleton-Young said.

Fast Facts

Calif. median home price: August 2012: $343,820 (Source: C.A.R.)
Calif. highest median home price by region/county August 2012: Marin, $806,450 (Source: C.A.R.)
Calif. lowest median home price by region/county August 2012: Tehama, $89,170 (Source: C.A.R.)
 
Calif. Pending Home Sales Index: August 2012: 118.9, up 2.7 percent from July's 115.8 
  
Calif. Traditional Housing Affordability Index: Second quarter 2012: 51 percent (Source: C.A.R.)
 
Mortgage rates: Week ending 9/20/2012 30-yr. fixed: 3.49% fees/points: 0.6% 15-yr. fixed: 2.77 fees/points: 0.6% 1-yr. adjustable: 2.61% Fees/points: 0.4% (Source: Freddie Mac)