Fair Weather for Homebuyers

first_img in Daily Dose, Data, Featured, News Three driving forces–mortgage rates, household income, and unadjusted home prices–which drove the housing market in 2018 continue to do so this year too, according to the latest data from First American’s Real House Price Index (RHPI) for November 2018.The RHPI measures the prices changes of single-family properties throughout the U.S. after adjusting for the impact of income and interest rate changes on consumer house-buying power over time at national, state and metropolitan area levels and therefore gauging housing affordability too.“November 2018 was no exception, as household income, mortgage rates, and the unadjusted house price index all increased compared with a year ago,” said Mark Fleming, Chief Economist, First American.According to the latest RHPI data,  real house prices grew at a slower rate month-over-month recording a growth of 0.8 percent between October and November 2018. However, they increased 15.3 percent year over year. However, consumer house buying power so a decrease both month-over-month as well as annually, decreasing 0.04 percent between October and November and 7.5 percent year over year.While average household income reflected an increase of 3.5 percent over the previous year, the RHPI data indicated that real house prices were 9 percent less expensive than they were in 2000.Compared with peak prices during the 2006 housing boom, the RHPI indicated that while unadjusted home prices were 1.8 percent above that period, real, house-buying power-adjusted house prices remain 35.3 percent below their 2006 housing boom peak.According to Fleming, six cities were leading the shift in the housing market to a buyers’ market. “Consider that in October 2018, real house prices increased month over month in all 44 of the markets we track in the RHPI. In November, however, some outliers emerged,” he said. “Real house prices declined in six cities, signaling an improvement in affordability.”A majority of these six cities have been amongst the hottest housing markets of 2018 and include San Jose, which saw an decline in RHPI of 0.7 percent; Boston with a 0.4 percent decline; Portland (-0.2 percent); Pittsburgh (-0.2 percent); San Diego (-0.1 percent); and Seattle (-0.1 percent).“Rising inventory is one reason these markets are bucking the national trend. According to Realtor.com, the number of active listings increased year over year in five of the six markets listed. In San Jose, Seattle, and San Diego, the increase in active listings was substantial, as active listings jumped 158 percent, 77 percent, and 46 percent, respectively,” Fleming said. “As more inventory enters the market, buyers have more options, bidding wars are less likely and sellers start reducing list prices.”Click here to read the full analysis. January 28, 2019 801 Views Sharecenter_img Fair Weather for Homebuyers? Affordability First American Home Home Prices HOUSING Mark Fleming Mortgage Rates Real Home Price Index 2019-01-28 Radhika Ojhalast_img

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