FNC Index: Rise in Home Prices Picks up in April

FNC Index: Rise in Home Prices Picks up in April

The latest FNC Residential Price Index (RPI), released Monday, June 17, 2013 by FNC, Oxford, MS,  shows that U.S. home prices continue to rise in April, up 0.7% from the previous month. April’s gain marks the largest price acceleration since June 2012, caused in part by rising seasonal demand entering spring and summer.

Improved credit availability, low interest rates, and low home prices continue to drive the housing recovery. Signs of rising mortgage rates – which have been hovering at historical lows in the last 10 months – have likely drawn out additional pent-up demand. Foreclosure activities continue to drop, with distressed sales contributing only 16.0% to total home sales, down from 17.8% in March and 21.6% a year ago. The median sales-to-list price ratio in April was 95.5, up from 93.7 in January and 92.5 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 April home prices rose much faster than in the previous months. The two narrower indices (30-MSA and 10-MSA composites) similarly recoded a nearly 1.0% increase.  On a year-over-year basis, home prices were up 4.6% from a year ago. The indices have been revised downward for the prior months, resulting in more moderate annual price accelerations.

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.2As 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.

 Year over year, Phoenix, Las Vegas, Sacramento, and San Francisco show the largest price increase at 29.1%, 15.8%, 11.6%, and 11.0% respectively. Lagging behind the national trends are Baltimore, San Antonio, Columbus, and Chicago where home prices in the last 12 months remain relatively flat. Chicago continues to track only second to Detroit in foreclosure sales, with nearly 1-in-3 homes sold during April being foreclosure sales.


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