Home Prices

Homebuyers and homeowners looking to refinance have been pushed into a whale of a dilemma. While one industry report shows that homeownership is quickly sliding into “unaffordable territory” in much of the U.S., mortgage rates are the most affordable they’ve been in 30 years. 

According to the just-released Primary Mortgage Market Survey by Freddie Mac, the 30-year fixed-rate mortgage is at an average of 2.65 percent, the lowest rate in the survey’s history, which dates back to 1971.

“A new year, a new record low mortgage rate. Despite a full percentage point decline in rates over the past year, housing affordability has decreased because these low rates have been offset by rising home prices,” said Sam Khater, Freddie Mac’s Chief Economist, commenting on the conundrum.

Overall savings are impressive

Freddie Mac’s survey found some interesting comparative tidbits about the shift in mortgage rates. As an example, a 30-year fixed-rate mortgage averaged 2.65 percent with an average 0.7 points for the week ending January 7, 2021, which is down from last week when it averaged 2.67 percent. 

A year ago at this time, the 30-year FRM averaged 3.64 percent. On a $300,000 mortgage, that’s a difference of more than $150 a month -- $1,209/mo. now vs. $1,371/mo. a year ago. But the real savings is in the overall out-of-pocket cost. All told, the total cost of the mortgage on the new rate would be $435,201 vs. $493,448 on last year’s rate.

For those who can swing a larger monthly payment, a 15-year fixed-rate mortgage averaged 2.16 percent with an average 0.6 points, down slightly from last week when it averaged 2.17 percent. A year ago at this time, the 15-year FRM averaged 3.07 percent. On a $300,000 mortgage, that equates to $1,953/mo. now vs. $2,082/mo. a year ago. 

More impressive is the savings on the total cost of a 15-year mortgage, dropping close to $100,000 from a 30-year note at $351,487 now vs. $374,735 with the mortgage rate a year ago.

A 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.75 percent with an average 0.3 points, up a smidge from last week when it averaged 2.71 percent. A year ago at this time, the 5-year ARM averaged 3.30 percent.

You’ll need good credit and 20 percent down

While the Freddie Mac survey sounds like a no-lose proposition, the truth is that to get rates like the ones listed, the survey focuses on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit. Freddie Mac also noted that borrowers may still pay closing costs that are not included in the survey.

If a consumer is going to act on these favorable rates, Khater says they better do it now.

“The forces behind the drop in rates have been shifting over the last few months, and rates are poised to rise modestly this year. The combination of rising mortgage rates and increasing home prices will accelerate the decline in affordability and further squeeze potential homebuyers during the spring home sales season,” he said.

Despite record-low mortgage rates, a new industry report shows that homeownership is quickly sliding into “unaffordable territory” in much of the United States.

In its fourth-quarter 2020 report, ATTOM Data Solutions, a property data firm, found that median home prices of single-family homes and condos were less affordable than historical averages in 55 percent of counties in the U.S.

That’s a sharp increase from 43 percent a year ago and 33 percent three years ago. Without falling mortgage rates and rising wages, the company said the number would likely be much higher.

To be considered affordable, a home with a mortgage must fall within a range that requires no more than 28 percent of a homeowner’s income to pay the mortgage, property taxes, and insurance.

That required income was then compared to annualized average weekly wage data from the Bureau of Labor Statistics. The analysis showed that 275 of 499 counties analyzed in the fourth quarter of 2020, or 55 percent, were less affordable than past averages.

Rising home prices

The main reason for the lack of affordability is the relentless increase in home prices. Even with the coronavirus (COVID-19) pandemic, which briefly halted sales, prices continued to rise and demand for homes ran well ahead of homes on the market.

In fact, prices in 2020 have risen faster than wages and wiped out the benefit that buyers would normally realize from declining mortgage rates. The report found major home-ownership expenses consumed 29.6 percent of the average wage across the nation during the fourth quarter of 2020. A year earlier, the figure was 26.4 percent.

The National Association of Realtors reported that the median existing-home price in November was $310,800, up 14.6 percent from November 2019. It said prices were higher in every region of the country. 

"Owning a home in the United States slipped into the unaffordable zone for average workers across the nation in the fourth quarter as the numbers continued a year-long slide in the wrong direction,” said Todd Teta, chief product officer with ATTOM Data Solutions. “The latest housing market data shows the average worker unable to meet the 28 percent affordability guideline used by lenders." 

Conditions look bleak for buyers

Teta says the outlook remains uncertain. For now, he says it’s a seller’s market, and “things are going in the wrong direction for buyers."

There were 499 counties listed in the report, and only 41 percent of them had homeowner costs that aligned with affordability guidelines for the average wage earner. They include Cook County, Ill., Harris County, Tex., and Philadelphia County, Pa.

There were 296 counties with unaffordable major expenses on median-priced homes for average earners. They include Los Angeles County, Calif., Maricopa County, Ariz., and San Diego County, Calif.

Two industry reports show that home prices have surged in the final months of 2020, offsetting the advantage buyers got from record-low mortgage rates.

The S&P CoreLogic Case-Shiller Index, a closely watched but lagging indicator, shows that home prices rose at the fastest rate since 2014 in October, the last month for which data is available.

More recent data comes from real estate broker Redfin, which reports that the median home sale price rose 14 percent in the four-week period ending December 20. Together, the two reports show homeowner equity continues to increase while the barrier to homeownership got a little steeper.

The S&P CoreLogic Case-Shiller price index tracks prices in 20 large housing markets and shows that prices increased at a 7.9 percent annual rate in October. In September, the rate of growth was 6.6 percent.

It’s the steepest increase in six years and was fueled by low mortgage rates and a huge increase in buyers, many of whom left apartments in cities in search of more space in the suburbs and smaller cities. Presumably, the coronavirus (COVID-19) pandemic played a role.

Phoenix prices rose the fastest

Some markets saw prices rise faster than others. Phoenix led the way with a 12.7 percent increase. Seattle was next at 11.7 percent, and San Diego was third at 11.6 percent.

New York, Chicago, and Las Vegas -- all cities hard-hit by the economic effects of the pandemic -- saw price gains of less than 7 percent.

The Redfin data shows that December was an exceptionally strong month for home prices, with the median sale prices hitting $320,714 -- a 14 percent year-over-year increase. The report also shows that pending home sales -- a measure of contracts signed but not yet closed -- were up 34 percent.

Picking up momentum

The pace of activity actually increased as the year drew to a close. Pending home sales surged 30 percent in the week ending December 20. However, active listings -- the number of homes on the market -- fell 31 percent year-over-year to a record low.

"Going into the new year, it will truly be out with the old, because there will be very few homes from 2020 left on the market," said Redfin’s chief economist Daryl Fairweather. "So those who resolve to buy a home in 2021 may need to wait with bated breath for sellers to list their homes.”

Fairweather predicts that the rising prices of home will lead to more homes being listed in 2021. But he says that increase in inventory will likely go fast since the pent up demand from buyers shows no sign of letting up. 

If you’re a homeowner, your net worth may be higher than it was before the start of the coronavirus (COVID-19) pandemic.

If you’ve managed to stay employed and haven’t run up a big credit card bill, then the equity in your home has likely made you richer, thanks to the rapid increase in home values over the last six months.

ATTOM Data Solutions, a property data firm, reports that 16.7 million U.S. homes were classified as “equity-rich” in the third quarter of 2020, meaning the combined estimated amount of loans secured by those properties was 50 percent or less of their estimated market value.

That represents 28.3 percent, or about one in four, of the U.S. homes with a mortgage. It’s up from 27.5 percent in the second quarter when home values began to take off.

How the pandemic affected the market

Home sales surged once shelter-in-place orders were lifted. Many of the buyers were apartment dwellers who were suddenly working from home and decided they needed more room. Many also determined that they could continue working remotely and didn’t confine their choices to homes in the city where they worked. Single-family home sales boomed in many smaller cities.

The increase in demand, without a corresponding increase in supply, put sellers in the driver’s seat, and home listing prices -- and sales prices -- rose quickly.

Not all homeowners are benefitting, however. The report shows that around 3.5 million homes -- or one in 17 homes with a mortgage -- are considered seriously underwater, meaning the homeowner owes more than the home is worth. But fortunately, that number has trended lower during the pandemic.

"Homeowner equity in the third quarter added another pebble to the pile of markers showing that the U.S. housing market continues to defy the broad downturn in the economy this year,” said Todd Teta, chief product officer with ATTOM Data Solutions. “Home prices keep rising, boosting the balance sheets of homeowners throughout most of the country."  

Economic bright spot

Teta says housing has been a bright spot in an otherwise shaky pandemic economy. He says homeowners stand to benefit as long as the market remains strong.

Coastal real estate markets, which tend to be among the most expensive in the nation, had far higher levels of home equity in the third quarter of 2020 than other areas of the United States. 

The top 11 states with the highest share of equity-rich properties in the third quarter were all in the Northeast and West, led by Vermont, California, Hawaii, Washington, and Idaho.

Real estate industry experts are still learning how the coronavirus (COVID-19) has affected the housing market and identifying trends that may last for a while. For one thing, homes are a lot more expensive than they were before the pandemic, but not everywhere.

The median home price in September surged by a record 15 percent, to $320,625, according to a report from real estate broker Redfin. More than a third of that increase has occurred since early July.

In August, pending home sales were up 26 percent year-over-year, and homes sold almost as fast as they could be listed. More than 45 percent of homes that went under contract had an accepted offer within the first two weeks on the market, a trend that has held relatively steady for the last 17 weeks.

Housing experts are in general agreement that the effects of the pandemic are driving sales and pushing up prices. With people spending so much time at home, there is increasing demand for homes with more indoor and outdoor space.

Tele-work trend

With millions of people now able to work from anywhere, it’s no longer necessary to live within commuting distance of the office -- or what used to be the office. Because of that, housing markets like New York and San Francisco -- two of the most expensive U.S. housing markets -- have seen median home prices decline since the pandemic.

Analyst Troy Ludtka with Natixis, an investment banking firm, told USA Today that these trends have bolstered home sales, and there’s little reason to believe the teleworking shift won’t at least partly continue even after the pandemic has subsided.

COVID-19 seems to have produced a reverse image of the housing market. Before the pandemic, urban real estate was quickly appreciating in value while rural homes went begging. Now, rural and suburban properties are selling quickly, resulting in faster-rising prices.

New demand for luxury homes

Before the pandemic, the strongest demand was for entry-level housing. Now, the Redfin report shows that large luxury homes are in demand.

“Large, expensive, luxury homes are taking up a bigger share of the homes that are selling, which is driving a high growth rate for the median sale price," said Redfin chief economist Daryl Fairweather. "Remote work is increasing demand from affluent people, while middle-income people are more often expected to do their jobs in-person, and many have been affected by furloughs and shutdowns."

Real estate professionals advise that people considering a home purchase should be prepared to act quickly once they find a property they like. However, buyers shouldn’t expect to engage in a lot of negotiation. The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, rose to 99.4 percent—an all-time high and 1.2 percentage points higher than a year earlier.

It’s also critical to get pre-approved by a lender before making an offer on a property. Obtaining a pre-approval letter will tell the seller you are serious and that your offer should be considered.

The Commerce Department reports that new home sales fell last month. At first glance, the 0.7 percent sales dip -- the largest monthly decline in five years -- could be taken as yet another sign that the economy is slowing.

While it may be that, the second part of the report is actually encouraging for those consumers who would like to become homeowners but can’t find a house that they can afford. The report shows the median price of new homes sold last month went down, falling below $300,000 for the first time in years.

Robert Frick, corporate economist at Navy Federal Credit Union, says that doesn’t mean builders are cutting prices. It simply means they are building more of the less-expensive homes that first-time buyers can afford.

“Hopefully this shows that builders are working to construct more affordable housing and that median price will continue to drop,” Frick told ConsumerAffairs. “Recent studies show half of prospective home buyers can't afford a home above $300,000, so for the industry to engineer a strong revival it must build more affordably-priced houses.”

Housing shortage

Sales of existing homes also fell in September and dropped at a steeper rate -- 2.2 percent. Lawrence Yun, chief economist at the National Association of Realtors (NAR), has spent the last few years urging the industry to build more entry-level homes.

“We must continue to beat the drum for more inventory,” Yun said last week. “Home prices are rising too rapidly because of the housing shortage, and this lack of inventory is preventing home sales growth potential.”

The shortage of existing homes pushed the median sale price up 5.9 percent in September, to $272,100, a factor that may have contributed to declining sales.

Since the housing market crash of 2009, the construction industry has produced new homes at about half the rate it did before the market collapsed. It has also focused on building more expensive luxury homes, not the kind of house most first-time buyers can afford.

Higher costs

When pressed on the issue, builders have complained about rising costs for materials and labor, as well as more stringent regulations. But location may also be a factor.

Strong Towns, a non-profit focused on community-building, points out that homes in hot markets with lots of high-paying jobs sell for more, and builders in recent years have focused on those areas.

Recent industry surveys show more people are moving out of expensive coastal markets and moving to smaller interior cities where real estate is a lot more affordable. The most recent new home sales report suggests builders may be following them.

After dipping earlier in the year, home prices are moving higher again -- and that may be prompting some potential buyers to get off the sidelines.

The monthly S&P Dow Jones Indices for July show home prices rose 3.2 percent on a year-over-year basis. Phoenix, Las Vegas, and Charlotte showed the biggest gains in the 20-City Composite Index.

In July, the median home in Phoenix increased in value by 5.8 percent year-over-year, followed by Las Vegas with a 4.7 percent increase. Charlotte was close behind with a 4.6 percent increase in the median home price.

"Year-over-year home prices continued to gain, but at ever more modest rates," said Philip Murphy, managing director and global head of Index Governance at S&P Dow Jones Indices. "Charlotte surpassed Tampa to join the top three cities, and Seattle may be turning around from its recent negative streak of YOY price changes, improving from -1.3 percent in June to -0.06 percent in July.

Still affordable

Despite the uptick in home values, affordability may be slightly improved because mortgage interest rates have trended lower recently. Mortgage News Daily reported this week that the most prevalent rate for a 30-year fixed-rate mortgage this week is 3.75 percent.

The Mortgage Bankers Association reports that applications for new home purchases surged 33 percent in August

Rising prices and still-low mortgage rates may be sending more buyers into the market, according to a new survey from the National Association of Realtors (NAR). The group reports that more than half of the consumers it surveyed said now is a good time to buy a home.

“Mortgage rates are at historically low levels, so I see no sign of the optimism about home buying fading,” said NAR’s chief economist Lawrence Yun. “However, the fact that slightly fewer are expressing strong intensity compared to recent prior quarters is implying some would-be buyers have concerns about the direction of the economy.”

Broken down demographically older consumers -- those born between 1925 and 1945 -- were most likely to believe it’s a good time to buy. Boomers were almost as bullish on the housing market.

Sales have slowed in recent months, and a major reason, housing economists say, is current homeowners have been reluctant to move and therefore have hesitated to put their homes on the market.

Consumers hoping to buy their first home, or perhaps move up, have been plagued by numerous headwinds over the last year, but those winds may be shifting.

In the last 18 months, mortgage interest rates have risen. Home inventory levels have fallen, which not only gives buyers fewer homes to choose from but puts upward pressure on prices. It’s enough to almost make you want to go on renting -- except that rents are also going up.

But here’s some welcome good news: that script is in the process of being flipped.

The Data & Analytics division of Black Knight, Inc.has released its latest Mortgage Monitor Report, which shows home affordability conditions have improved markedly. The rapid home appreciation growth of recent months has essentially flatlined. Even better, mortgage rates have begun to fall. Black Knight Data & Analytics President Ben Graboske says that combination has produced the best home affordability in 18 months.

"For much of the past year and a half, affordability pressures have put a damper on home price appreciation," said Graboske. "Indeed, the rate of annual home price growth has declined for 15 consecutive months.”

Improved affordability

Declining prices suggest that homes are staying on the market a little longer and are attracting fewer competing buyers, meaning fewer bidding wars.

“In November 2018 -- when rising interest rates hit a seven-year high and home price growth fell by half a percent in a single month -- it took 23.3 percent of the median household income to make the principal and interest payments when purchasing the average-priced home,” he said.  

The recent drop of 30-year mortgage rates to 3.75 percent means improved affordability for millions of would-be buyers. But how, exactly?

"Whereas nine states were less affordable than their long-term norms back in November -- a key driver behind the subsequent deceleration in home prices -- only California and Hawaii remained so as of July,” Graboske said.

Lower monthly payment

Even though the average home price has risen by more than $12,000 since November, lower interest rates more than make up the difference, meaning the average monthly payment is $108 lower when the buyer puts down 20 percent.

“Lower rates have also increased the buying power for prospective homebuyers looking to purchase the average-priced home by the equivalent of 15 percent, meaning that they could effectively buy $45,000 'more house' while still keeping their payments the same as they would have been last fall,” Graboske said.

National home prices have been skewed higher in recent years by huge increases in home prices on the West Coast. That price escalation has finally dissipated a bit, especially in California.

While prices nationally have leveled off, buyers should keep in mind that they may still be rising in some secondary markets that are only now beginning to heat up.

There’s good news for would-be homebuyers who have struggled to find the right house in their price range. Home values have fallen for two straight months, according to real estate marketplace Zillow.

Home values have declined slightly for two straight months. Should that trend continue, it could make homes more affordable for more consumers, especially since mortgage rates have declined at the same time.

By early 2019, home affordability had become an issue preventing some consumers from becoming homeowners. Before April, home values had gone up for 85 consecutive months, adding more than $78,000 to the price of a median home.

While home values were less in April than in March, and less in May than April, the median home still costs more than it did a year ago. But Zillow reports year-over-year appreciation is growing at a slower rate. 

A year ago, home values were growing at an annual rate of 7.5 percent. In May, they grew by 5.4 percent.

Positive for the market

Zillow Director of Economic Research Skylar Olsen says the slowdown in home values after such a long period of rising prices is actually good for the overall housing market.

"While the slowdown has been arguably abrupt, the soft declines over the past two months should not cause too much alarm,” Olsen said. 

“The aggressive pace of home values over the past several years was known to be unsustainable. Buyers simply couldn't afford it, so prices are correcting.”  

Rents are rising

Because homes became increasingly unaffordable, more consumers decided to remain renters. But the Zillow report shows renting a home is getting increasingly expensive.

The median monthly rent has now increased for seven months in a row, rising 2.7 percent in May to $1,479. Rents are growing faster now than a year ago in 28 of the top 35 markets, led by Las Vegas at 8.9 percent.

Because of that, more renters may now consider becoming homeowners, encouraged by a decline in mortgage rates. But Olsen says the dip in home values may not last.

“The significant drop in mortgage rates, as well as renewed rent growth, may help return U.S. housing values to positive appreciation earlier than otherwise," she said.

Another factor that could raise home values again is supply and demand. Inventory levels fell in May for the third straight month after the number of available homes rose slightly in the first two months of the year. A pick-up in home-buying activity could easily reduce inventory levels even more and push the median home price above its current $226, 800.

A survey by LendingTree reveals the housing market continues to pose stiff challenges to first-time home buyers.

The online mortgage marketplace commissioned a poll of consumers who hope to purchase their first home in the next two years. It found a strong desire among millennials to own a home, but it also revealed gaps in knowledge about the process.

Most strikingly, the survey revealed a disconnect between what first-time buyers can afford to pay and the realities of today’s housing market. Two-thirds of the group said they have encountered a shortage of homes in their price range.

When asked what they thought they could pay, most said they were looking for a home priced at $150,000 or less. The median-priced U.S. home -- including new homes -- is now $300,000, well out of that stated price range.

Looking for a fixer-upper

Perhaps because of that, 85 percent said they would consider purchasing a fixer-upper if they could get it at a lower cost. That matches our reporting from earlier this week in which 60 percent of first-time buyers said they planned to purchase a home in need of renovation.

"The combination of rising home prices and limited entry-level homes for sale is prompting many home shoppers to consider homes that need renovating," said Danielle Hale, chief economist at realtor.com, which commissioned that research.

Besides affordability, the LendingTree study identified other issues many first-time buyers face. Nearly half had no idea that the closing process can be lengthy, taking an average of 43 days.

More than 25 percent of consumers hoping to purchase their first home have low credit scores, meaning they might not qualify and will pay a higher interest rate if they do. Only 15 percent had a credit score of 740 or higher.

Lack of funds

Finally, many would-be homeowners simply lack the income and savings to make a home purchase happen in the immediate future. Nearly half of the first-time buyers in the survey said looking for a home they can afford is the most stressful part of the process.

"Although the homeownership rate is lower among millennials than earlier generations at the same age, our research demonstrates that purchasing a home is still a significant milestone for many,” said Tendayi Kapfidze, chief economist at LendingTree. “However, strengthening your financial profile is crucial for those thinking of buying a home."  

Kapfidze suggests making a concerted effort to raise your credit score by paying all bills on time and paying down credit card balances. A higher score may make the approval process easier and will save money over the life of the mortgage by qualifying the applicant for a lower interest rate.

Consumers willing to move in order to purchase an affordable entry-level home have two good choices -- Tampa and Las Vegas.

Young people, especially, know full well the challenges of purchasing that first home. You have to save for a down payment while seeing your rent go up each year. With shrinking home listings, it’s sometimes hard to even find a home in your price range.

Then, when you do find a house you like and can afford, you face competition from other first-time buyers who might be willing to pay a little more than you are. But if you’re willing to move to another town, the housing experts at Zillow say both Tampa and Las Vegas offer some real opportunities.

Each year, Zillow ranks the 35 largest housing markets for being friendly to first-time buyers who are willing to pack up and move to get the home of their dreams -- at least the starter home of their dreams. For the second year in a row, Tampa came out on top.

First-time buyers need a market where there are plenty of smaller, less-expensive homes. These are exactly the types of homes that have been in short supply for the last five years, but Zillow says that trend appears to be reversing a bit. Home sales are down and the inventory of starter homes has finally begun to rise.

Shortage is easing

"The shortage of starter homes across the country is finally starting to ease, and that's good news for would-be first-time buyers who have been saving up to make the leap into homeownership," said Skylar Olsen, Zillow's director of economic research. "Unfortunately, prices of homes in the lower third of the market have risen so much in recent years that for many households' budgets they no longer qualify as affordable. But markets like Tampa and Las Vegas still provide plenty of bargains."

Both of those markets got hit hard during the housing crash a decade ago and prices, while recovering, are still below their housing bubble highs. Tampa has its share of million dollar homes, but it also has a relatively large inventory of smaller homes priced well below $200,000.

Inventories are up 1 percent

That trend could spread to other parts of the country in the months ahead. Zillow reports that slowing sales have driven up inventory levels by 1 percent over the last 12 months. According to the real estate marketplace, it’s the first time in five years that the spring home-buying season has begun with rising inventory levels.

In even better news for first-time buyers -- especially those with no desire to move to another town -- the inventory of less-expensive starter homes is leading the increase, rising 4.1 percent after being down 12.9 percent last year.

But Zillow cautions that even with this change, there still are not enough homes for sale to meet buyer demand, and the market remains competitive.

The housing market has been red hot in the last five years, but there have been signs it has cooled off in the last 12 months. A new academic study suggests it could get even cooler in the months ahead.

Researchers at Florida Atlantic University (FAU) and Florida International University have developed an index to track housing demand in the largest U.S. markets. It’s called the Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index.

In 19 of the 23 markets it tracks, it now shows “slight to significant” drops in demand from consumers interested in purchasing homes.

"Historical evidence indicates that home prices adjust to these directional pressures," said Ken Johnson, a real estate economist at FAU and one of the creators the index.

What it means for home prices

It stands to reason that a drop in demand would lead to a drop -- or at least a leveling off -- in home prices. Prices have risen consistently since the financial crisis because inventory levels -- the supply of available homes for sale -- has steadily decline.

But within the last year, the real estate industry has reported small increases in inventory levels. Real estate marketplace Zillow recently reported that buyers are are moving into the driver’s seat as the housing market slows, especially in some of the nation's hottest markets.

Zillow reports that market conditions now favor buyers more than they did a year ago, a conclusion it reached after analyzing the share of property listings with a price cut, the length of time it takes to sell a home, and the sale-to-list price ratio.

No surprise

"It is no surprise that the markets which pushed the bounds of affordability over the housing recovery are now experiencing significant cooling," said Skylar Olsen, Zillow director of economic research. "As down payments and mortgage payments far outpaced incomes, buyer demand eventually exhausted itself.”

The Florida researchers now conclude that many would-be buyers have left the market, content or resigned to rent a home for now. With fewer buyers ready to make a purchase, and with inventory levels slowly increasing, sellers may have to wait longer and accept less money to make a sale.

Of the 19 metro areas where housing demand is falling, the Florida researchers single out Dallas, Denver, and Houston as markets where demand is falling the fastest. They say demand is also falling in Kansas City, Pittsburgh, Seattle, San Francisco, and Miami, but at a slightly slower rate.

The number of homes for sale nationwide increased in January, reversing a trend that began in 2014 and has contributed to steadily rising home prices.

A new report from real estate marketplace Zillow shows housing inventory grew 1.2 percent last month, compared to January 2018. Theoretically, more homes for sale should balance out the supply and demand equation, which has favored sellers for more than four years.

But a closer look at the numbers suggests the average home buyer might not benefit from the shift, at least not yet. The Zillow report notes that the biggest increase in housing inventory occurred in five red-hot markets where homes are among the most expensive in the country and out of reach for the average buyer.

Housing inventory in more modestly priced markets like Pittsburgh and Baltimore continued to fall, with both those cities seeing the number of available homes on the market falling by 10 percent. In fact, property in the entry-level segment of the market -- the so-called “starter homes” -- is still not that easy to find.

Fewer homes mean higher prices

Inventory levels are closely tied to price increases. When the market is flooded with a glut of homes for sale, buyers have more negotiating leverage. But the reverse is true when there are fewer homes than people who want to buy them.

Zillow reports the median-priced home in the U.S. in January cost $225,300, up 7.5 percent year-over-year. Price increases are nearly twice as high in some of the nation’s more modestly priced housing markets like Indianapolis and Atlanta. Even so, Zillow senior economist Aaron Terrazas believes the current trend is encouraging.

"For four years, it felt like home buyers couldn't catch a break as for-sale inventory became tighter and tighter with each passing month," Terrazas said. "But during the second half of 2018, something shifted. Home buyers aren't out of the woods yet, but there is a glimmer of light on the horizon”

Hurdles for first-time buyers

The number of homes on the market is moving higher, albeit at a slow pace. And first-time buyers still face hurdles due to rising prices and mortgage rates that are higher than at this time a year ago. Terrazas concedes that demand still outweighs supply so that the market remains competitive.

First-time buyers who are still renting are also facing rising costs as the Zillow report shows rents grew on an annual basis for the third straight month. Rents rose in January by  2.1 percent over a year ago to a median of $1,468.

Home buyers have faced challenges over the last year because of rising mortgage rates, but those rates have dipped in the last month -- at least for buyers with the best credit.

According to the latest monthly report from LendingTree, buyers with the best credit profiles were offered 30-year fixed-rate mortgage rates that averaged 4.19 percent, down from 4.35 percent in December.

The difference of 16 basis points on a $200,000 mortgage lowers the monthly payment by $18.75.

There was a bigger drop for consumers refinancing their mortgage. The average offer to refinance an existing loan fell from 4.34 percent to 4.14 percent.

Credit scores a major factor

LendingTree is a mortgage marketplace. It allows homebuyers to enter their information, and then participating mortgage lenders try to offer the most competitive terms. The company says while credit scores are a major factor in getting a low interest rate, other factors are also considered, such as the type of property, the borrower’s income, and the loan-to-value ratio.

The average borrower also saw mortgage rates decline from December to January, but the average rate was higher than for those with the best credit profiles. The average mortgage rate for all borrowers was 4.98 percent, 19 basis points lower than in December.

Mortgage rates have risen over the past 12 months, but home buyers caught a break in January when the rate on the 10-year Treasury bond -- a key benchmark for mortgages -- dropped from 3.18 percent in December to 2.5 percent.

Credit scores made a big difference in the interest a home buyer paid in January. Buyers with a credit score of 760, which is considered “excellent,” secured a mortgage rate of 4.79 percent. Those with a score of 639 paid an average rate of 5.75 percent.

That’s a difference of $119 a month on a $200,000 mortgage, underscoring one of the major benefits of improving your credit score.

Lower rates good news for the market

Realtors are hopeful that a softening of mortgage rates could help housing recover from a lackluster 2018. Home prices continued to rise in most markets, but the pace of home sales declined.

Lawrence Yun, chief economist for the National Association of Realtors (NAR), said 2018 ended on a promising note, all things considered .

“Home prices continued to rise in the vast majority of markets but with inventory steadily increasing, home prices are, on average, rising at a slower and healthier pace,” Yun said.

Total existing-home sales, including single-family homes and condos, fell 1.8 percent to a seasonally adjusted annual rate of 5.180 million in the fourth quarter of last year, down from 5.273 million in the third quarter. That number is significantly lower than the sales pace during the fourth quarter of 2017.

Housing affordability remains a concern for many would-be home buyers, especially now that mortgage rates are going up. But a new report from real estate marketplace Zillow suggests one segment of the housing market is losing pricing power.

A Zillow analysis found that home builders lowered the price on their new inventory at a faster rate in the fourth quarter of 2018 than in the first quarter. The report found a quarter of new homes on the market in the last three months of the year had at least one price reduction. In the first quarter, only 19 percent had a price cut.

The same trend is also showing up in existing homes, though the statistics may appear misleading. Overall existing home values continue to rise, albeit at a slower rate.

Starter homes getting more expensive

When broken down by price range, entry-level starter homes continue to go up in value while more expensive homes have experienced more price cuts, just as new homes have. That’s because there are a lot more consumers who can only afford an entry-level home, while there is a limited number for sale.

New construction must compete with more expensive existing homes, for which there are fewer buyers. With the law of supply and demand asserting itself, prices have to come down.

Prices have risen since the housing recovery in large part because of tight inventories. As the economy improved and more people wanted to buy homes, they found a declining number of homes in the entry-level, moderately-priced segment while there were plenty of expensive homes.

Housing shortage continues

Home builders are producing only about half as many new homes as they did before the housing crash, and those tend to be large and expensive. As we reported in 2017, home building activity wasn’t alleviating the housing shortage because most first-time home buyers couldn’t afford them.

Homebuilders have cited higher costs for materials, labor, and land to explain their focus on more expensive homes. While homebuilders no doubt could easily sell small homes priced under $200,000, builders say they wouldn’t be profitable.

“Facing high and rising construction costs, builders have few options but to target upmarket while homebuyers are increasingly squeezed by tight affordability and rising interest rates,” said Zillow Senior Economist Aaron Terrazas.

But Terrazas says the price cutting trend might not last. He says builders appear content to build fewer new homes and charge more for them. With fewer new homes in the pipeline, the price cuts may not last.

The housing market has cooled in recent months with home sales slowing from their redhot pace, but the prices consumers are paying for homes is still going up.

The monthly S&P CoreLogic Case-Shiller Index shows home prices rose an average of 5.5 percent in October even as pending home sales, as measured by the National Association of Realtors (NAR), fell 2.6 percent.

Lawrence Yun, NAR’s chief economist, said that ten straight months of decline certainly isn’t good news for the housing market.

“The recent rise in mortgage rates have reduced the pool of eligible homebuyers,” he said.

But that hasn’t stopped home prices from rising. The Index gauges housing in all nine U.S. Census divisions and found October’s rise in the median home price matched September’s results.

Las Vegas leads the way

Prices rose the most in Las Vegas, San Francisco, and Phoenix. The median price in Las Vegas was up 12.8 percent, followed by San Francisco at 7.7 percent and Phoenix close behind with a 7.6 percent year-over-year increase.

Even measured on a month-to-month basis, the price of putting a roof over your head is climbing, albeit at a much slower rate. October home prices were 0.1 percent higher than they were in September.

Normally, when sales slow down so do prices, but this market is different. Since the recovery from the 2008 housing crash, the number of available homes has steadily declined. There is still enough demand for homes to support the value of those that are available, and in some cases push them higher.

Mortgage rates are now a factor

Rising mortgage rates also create headwinds for potential buyers, making monthly mortgage payments that much more expensive. David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, says that means homes sales are likely to remain on their downward trend.

"The combination of higher mortgage rates and higher home prices rising faster than incomes and wages means fewer people can afford to buy a house,” Blitzer said. “Fixed rate 30-year mortgages are currently 4.75 percent, up from 4 percent one year earlier.”

At the same time, home prices are up 54 percent since bottoming in 2012. Consumers who hope to sell their homes in 2019 may find they have to be more flexible on price. Potential buyers, meanwhile, may have a little more bargaining power.

The Federal Housing Finance Agency (FHFA) has announced it is raising the maximum conforming loan limits for mortgages Fannie Mae and Freddie Mac purchase in 2019 from $453,100 to $484,350.

It follows years of rising home prices, which has caused the previous maximum to fall below what many homes sell for in the nation's most expensive housing markets. It's the third increase since 2006.

In some markets, the cut-off will be even higher. In Los Angeles, New York, San Francisco, and Washington, D.C., the maximum loan limit will be $726,525, which is 150 percent of $484,350. Meanwhile, limits will rise in all but 47 counties in the country.

The loan limits define the maximum one-unit single-family mortgage amounts that Fannie Mae and Freddie Mac can finance. Real estate professionals say they are also used to define loan limits under FHA programs.

'Keeping the American Dream within reach'

The move won praise from the National Association of Realtors (NAR).

"The National Association of Realtors is pleased to see the Federal Housing Finance Agency raise its national conforming loan limits for 2019," said NAR President John Smaby. "Today's decision reflects rising or near record high home prices in many U.S. markets, and the move helps keep the American Dream within reach for countless families working with Fannie Mae and Freddie Mac."

Smarby says home prices have risen so much in some markets that the higher loan limits are necessary to keep the market from grinding to a halt.

"Without this assurance that loan limits keep up with home price growth, borrowers across the country risk being pushed out of the market altogether as mortgage rates and rising home prices continue to hold back potential homebuyers," he said.

Limits will vary depending upon location

Conforming loan limits will vary based on property values in certain areas. FHFA has produced this website to assist consumers in learning what the loan limits are in their particular county.

The update is normally an annual affair. FHFA updates the national and high-cost limits based on the FHFA's national price index.

NAR says the market for private financing has improved in recent years, but it is still limited by the aftermath of the Great Recession when mortgage lenders implemented more stringent lending standards.

Consumers who hope to purchase homes usually face more onerous standards if they do not possess excellent credit.

There continues to be warnings about the state of the housing market. The latest warning comes from the real estate industry itself.

Reacting to another reported rise in home prices in March, Lawrence Yun, chief economist for the National Association of Realtors (NAR), said the 6.5 percent increase in home prices “is simply not sustainable,” because prices are growing much faster than consumers' income.

“From the cyclical low point in home prices six years ago, a typical home price has increased by 48 percent, while the average wage rate has grown by only 14%,” Yun said. “Rising interest rates also do not help with affordability.”

The March price report from S&P/Case Shiller showed the 6.5 percent increase in home prices matched the price increase for February. The hottest real estate markets showed the biggest gains.

Seattle, Las Vegas, and San Francisco once again reported the highest year-over-year gains among the 20 cities in the survey. In March, Seattle recorded a 13 percent year-over-year price increase, while Las Vegas had a 12.4 percent increase.

Another housing bubble?

The rapid increase in home prices has triggered warnings of another housing bubble, like the one that crashed the housing market in late 2008. However, there are important distinctions between the two.

The early 2000s housing bubble was fueled by extremely relaxed mortgage lending standards, resulting in a huge increase in demand for housing, often from consumers with poor credit who got stuck with subprime mortgages. When millions of these subprime loans went into foreclosure, it triggered a financial crisis as well as a housing crisis.

Today, the situation is very different. There is strong demand from well-qualified buyers, but a shortage of homes to purchase. This demand and supply imbalance is what is sending home prices skyrocketing.

Unfortunately, the result could be the same. If home prices not only level off, but actually retreat, it could leave some consumers – who purchased their homes at the very top of the market – owing more than their homes are worth.

No one is suggesting the result could be as catastrophic as a decade ago, but if you happen to be one of those who pay top dollar for your home, it certainly won't turn out to be a good investment.

More homebuilding needed

Yun says the way out of this situation is to increase the supply of homes for sale. The best way to do that, he says, is simply build more homes.

“Homebuilding will be the key as to how the housing market performs in the upcoming years,” Yun said.

Weakening demand could also help. If fewer people are competing to purchase homes, there is less upward pressure on home prices. There's evidence that might be happening.

A new report from real estate brokerage firm Redfin shows its Housing Demand Index dropped 13 percent from March to April for the third consecutive monthly decline. Redfin chief economist Nela Richardson believes the drop in demand is directly tied to lower inventory levels. With fewer homes to choose from, more would-be homebuyers are resigning themselves to renting.

Sales of existing homes took a tumble last month, flashing a possible warning sign for the housing market.

In its monthly report, the National Association of Realtors (NAR) said existing home sales fell 2.5 percent in April from March. Sales are off 14 percent from April 2017, with year-over-year sales declining for two consecutive months.

Lawrence Yun, NAR's chief economist, says it's not because people don't want to buy homes, they just can't find homes to buy.

"The root cause of the underperforming sales activity in much of the country so far this year continues to be the utter lack of available listings on the market to meet the strong demand for buying a home," Yun said.

Other headwinds

Would-be buyers are facing other headwinds. Interest rates on mortgages are climbing at the fastest pace in nearly a half century, according to Freddie Mac. The average rate on a 30-year fixed-rate mortgage is 4.66 percent, up from 4.61 percent last week. A year ago, it was 3.95 percent.

“While this spring’s sudden rise in mortgage rates are taking up a good chunk of the conversation, it’s the stubbornly low inventory levels in much of the country that are preventing sales from really taking off like they should be,” said Freddie Mac Chief Economist Sam Khater.

The low inventory of houses for sale not only makes it harder to find a home to purchase, it makes the ones that are available more expensive. Zillow's April Real Estate Market Report shows home values are rising at the fastest rate since just before the housing market crash.

Median home value rises 8.7 percent

Over the last 12 months, Zillow says national home values rose 8.7 percent, to a median of $215,600. It's not any cheaper to rent. Zillow reports median rents are up 2.5 percent over the last 12 months, to a median payment of $1,449.

The NAR report has some good news, however. Total housing inventory at the end of April was up nearly 10 percent, but it was still down 6.3 percent from the end of April 2017. Yun says the multiple factors affecting the market continue to pose trouble for people who want to buy a home.

"Realtors say the healthy economy and job market are keeping buyers in the market for now even as they face rising mortgage rates,” he said. “However, inventory shortages are even worse than in recent years, and home prices keep climbing above what many home shoppers are able to afford."

With the spring homebuying season just getting underway, home shoppers are facing a double challenge. There are fewer homes to buy and they cost more. In fact, there is new evidence suggesting that the average wage-earner is getting priced out of the housing market.

This week, the S&P CoreLogic Case-Shiller Indices showed home prices rose in January in all 20 monitored real estate markets, with prices rising 6.2 percent year-over-year. Seattle, Las Vegas, and San Francisco saw the biggest year-over-year gains in the 20 cities.

Home prices in Seattle made the biggest jump, rising 12.9 percent. Las Vegas and San Francisco were not far behind, with gains of 11.1 percent and 10.2 percent respectively.

No longer affordable

Attom Data Solutions reports additional discouraging news for buyers. In 68 percent of the 446 counties it analyzed, it found that the median-priced home is no longer affordable for the average wage-earner.

The firm reached that conclusion by calculating the amount of income needed to make monthly house payments, then assumed a 3 percent down payment and a 28 percent maximum "front-end" debt-to-income ratio.

Among the markets where the average consumer can no longer afford the median-priced home are Los Angeles County, Calif.; Maricopa County (Phoenix), Ariz.; San Diego County, Calif.; Orange County, Calif.; and Miami-Dade County, Fla.

The report found the average consumer can still afford a median-priced home in Cook County (Chicago), Ill.; Harris County (Houston), Tex.; Dallas County, Tex.; Wayne County (Detroit), Mich.; and Philadelphia County, Pa.

'Affordability aftershocks'

"Coastal markets are the epicenter of the U.S. home affordability crisis, but affordability aftershocks are now being felt further inland as housing refugees migrate from the high-cost coastal markets to lower-priced markets in the middle of the country where good jobs are available," said Daren Blomquist, senior vice president with ATTOM Data Solutions. "That in turn is pushing home prices above historically normal affordability limits in those middle-America markets."

The problem appears to stem from increased competition for a limited number of homes. David Blitzer, managing director at S&P Dow Jones Indices, says fewer homes for sale is one of two problems facing the housing market. The other is a low vacancy rate.

"The current months-supply -- how many months at the current sales rate would be needed to absorb homes currently for sale -- is 3.4," Blitzer said. "The average since 2000 is 6.0 months, and the high in July 2010 was 11.9."

But Blitzer disagrees that affordability is a concern. He says his data shows that a family with median income can still afford a mortgage for a median-priced home. They'll just have fewer to choose from.

The increases in home prices keep on coming.

Property information provider CoreLogic reports its Home Price Index (HPI) shows housing prices across the U.S. were up 7% in February from the same month a year ago.

On a month-over-month basis, prices rose 1%.

“Home prices and rents have risen the most in local markets with high demand and limited supply, such as Seattle, Portland and Denver,” said CoreLogic Chief Economist Dr. Frank Nothaft. “The rise in housing costs has been largest for lower-tier-priced homes.”

According to Nothaft, from December to February in Seattle, the HPI shot up 12% and the CoreLogic single-family rent index jumped 6% percent for all price tiers compared with the same period a year earlier.

He notes, though, that when looking at only lower-cost homes in Seattle, the price increase was 13% and the rent increase was 7%.

In the year ahead

The CoreLogic HPI Forecast indicates home prices will increase by 4.7 percent on a year-over-year basis from February 2017 to February 2018, and on a month-over-month basis home prices are expected to increase by 0.4 percent from February 2017 to March 2017.

“Home prices continue to grow at a torrid pace so far in 2017 and these gains are likely to continue well into the future,” said CoreLogic President and CEO Frank Martell. “Home prices are at peak levels in many major markets and the appreciation is being driven by a number of dynamics -- high demand, stronger employment, lean supplies and affordability -- that will continue to play out in the coming years.”

Home price gains continued in January on both a year-over-year and month-over-month basis.

According to the S&P CoreLogic Case-Shiller Indices, the National Home Price NSA Index, covering all nine U.S. census divisions, jumped 5.9% from a year earlier, setting a 31-month high.

The 10-City Composite was up 5.1%, and the 20-City Composite reported a rise of 5.7%.

Seattle, Portland, and Denver had the highest year-over-year gains among the 20 cities over each of the last 12 months. Seattle led the way in January with an 11.3% year-over-year price increase, followed by Portland (+9.7%) and Denver (+9.2%).

Twelve cities reported greater price increases in the year ending January 2017 versus the year ending December 2016.

“Housing and home prices continue on a generally positive upward trend,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices.

“The recent action by the Federal Reserve raising the target for the Fed funds rate by a quarter percentage point is expected to add less than a quarter percentage point to mortgage rates in the near future. Given the market’s current strength and the economy, the small increase in interest rates isn’t expected to dampen home buying. If we see three or four additional increases this year, rising mortgage rates could become a concern."

Month-over-month

Before seasonal adjustment, the National Index posted a month-over-month gain of 0.2% in January. The 10-City Composite was up 0.3% and the 20-City Composite inched ahead 0.2%.

After seasonal adjustment, the National Index recorded a 0.6% month-over-month increase, while both the 10-City and 20-City Composites each reported a 0.9% advance. Thirteen of 20 cities reported increases in January before seasonal adjustment; after seasonal adjustment, 19 cities saw prices rise.

“While prices vary month-to-month and across the country, the national price trend has been positive since the first quarter of 2012,” said Blitzer. “Tight supplies and rising prices may be deterring some people from trading up to a larger house, further aggravating supplies because fewer people are selling their homes. At some point, this process will force prices to level off and decline -- however we don’t appear to be there yet.” 

Housing prices across the U.S. were unchanged in January, according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI).

This is just the second month since early 2012 that the HPI has failed to increase. The other occurrence was in November, 2013. The previously reported December HPI increase of 0.4% was unrevised.

On a year-over-year basis -- from January 2016 to January 2017 -- house prices were up 5.7%.

The FHFA monthly HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.

Regional performance

For the nine census divisions, seasonally adjusted monthly price changes from December, 2016 to January, 2017 ranged from -2.0% in the East South Central division to +0.6 percent in the Pacific division.

The 12-month changes were all positive, ranging from +3.5% in the East South Central division to +8.3% in the Mountain division.

The complete report may be found on the FHFA website

There's a good chance the value of your home went up during January.

Property information provider CoreLogic reports its Home Price Index (HPI) shows home prices nationwide -- including distressed sales -- shot up 6.9% in January from the same month a year ago and inched ahead 0.7% from December 2016.

“With lean for-sale inventories and low rental vacancy rates, many markets have seen housing prices outpace inflation,” said CoreLogic Chief Economist Dr. Frank Nothaft.

Looking ahead

The increase in values seems likely to continue.

“The spring home buying season is shaping up to be one of the strongest in recent memory,” said Frank Martell, president and CEO of CoreLogic. “A potent mix of progressive economic recovery, demographics, tight housing stocks and continued low mortgage rates are expected to support this robust market outlook for the foreseeable future.”

According to the CoreLogic HPI Forecast, home prices should advance of 4.8% from January 2017 to January 2018 and increase 0.1% from January to February.

Home prices across the U.S. edged up 0.5% from October to November rose in November, and posted a year-over-year advance of 6.1%.

At the same time, the Federal Housing Finance Agency (FHFA) revised its monthly House Price Index (HPI) downward to show a gain of 0.3% instead of the 0.4% increase initially reported.

Regional breakdown

For the nine census divisions, monthly price changes ranged from -0.2% in the South Atlantic division to +1.5% in the Pacific division.

The 12-month changes were all positive, ranging from +4.7% in the Middle Atlantic division to +7.7% in the Pacific division.

The monthly HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.

The complete report may be found on the FHFA website.

Jobless claims

An increase last week in the number of people filing first-time applications for state unemployment benefits.

The Department of Labor (DOL) reports initial jobless claims rose by 22,000 in the week ending January 21 to a seasonally adjusted 259,000. The previous week's level was revised up by 3,000 to 237,000.

The four-week moving average was down by 2,000 from the previous week to 245,500 -- the lowest level since November 3, 1973, when it was 244,000.

The four-week moving average, due to its relative lack of volatility, is considered a more accurate gauge of the labor market.

The full report is available on the DOL website.

Home prices in September continued their rise across the country over the last 12 months.

According to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine U.S. census divisions, the National index was up 5.5% on a year-over-year basis.

The 10-City Composite jumped 4.3%, while the 20-City Composite was up 5.1%.

Seattle, Portland, and Denver enjoyed the highest year-over-year gains among the 20 cities over each of the last eight months. Seattle led the way with an 11.0% year-over-year increase, followed by Portland at 10.9% and Denver with an 8.7% advance.

In all, 12 cities reported greater price increases in the year ending September 2016 versus the year ending August 2016.

“The new peak set by the S&P Case-Shiller CoreLogic National Index will be seen as marking a shift from the housing recovery to the hoped-for start of a new advance” said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “While seven of the 20 cities previously reached new post-recession peaks, those that experienced the biggest booms – Miami, Tampa, Phoenix, and Las Vegas -- remain well below their all-time highs.”

Month-over-month

Before seasonal adjustment, on a month-over-month basis, the National Index posted a September gain of 0.4%, with both the 10-City Composite and the 20-City Composite up 0.1%.

After seasonal adjustment, the National Index rose 0.8%, the 10-City Composite was up 0.2%, and the 20-City Composite advanced 0.4%.

Fifteen of 20 cities reported increases in September before seasonal adjustment; after seasonal adjustment, all 20 cities saw prices rise.

Blitzer said the market is showing several positive signals, including a rise in sales of existing and new homes and new-home construction at a post-recession peak.

The price of houses across the U.S. continued to gain in value during the third quarter.

The Federal Housing Finance Agency (FHFA) reports its House Price Index (HPI) was up 1.5% in the July-August quarter and 6.1% percent from the third quarter of 2015 following an advance of 1.2% in the second quarter.

On a month-over-month basis, the HPI rose 0.6% in September from August.

“Our data indicate that the deceleration in home price growth that we observed in late spring proved to be short-lived,” said FHFA Supervisory Economist Andrew Leventis. “While price growth in select markets has cooled somewhat for the U.S. as a whole, the third quarter showed no evidence of a widespread slowdown.”

While the HPI rose 6.1% during last year's third quarter, prices of other goods and services were nearly unchanged. The inflation-adjusted price of homes rose approximately 6.0% over the last year.

The HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.

Report highlights

• Home prices rose in 49 states between the third quarter of 2015 and the third quarter of 2016; Delaware and the District of Columbia were the only areas not to see price increases. The top five states in annual appreciation were: 1) Florida 10.7%; 2) Oregon 10.4%; 3) Washington 10.4%; 4) Colorado 10.0%; and 5) Utah 9.5%.
• Among the 100 most populated metropolitan areas in the U.S., annual price increases were greatest in Tacoma-Lakewood, Wash. (MSAD), where prices increased by 12.9%. Prices were weakest in New Haven-Milford, Conn., where they fell 1.7%.
• Of the nine census divisions, the South Atlantic division experienced the strongest increase in the third quarter, posting a 1.8% quarterly increase and a 7.1% increase since the third quarter of last year. House price appreciation was weakest in the New England division, where prices rose 0.8% from the previous quarter.

The full report may be found on the FHFA website.

Jobless claims

First-time applications for state unemployment benefits blipped higher in the week preceding Thanksgiving.

The Department of Labor (DOL) reports initial jobless claims rose 18,000 in the week ending November 19 to a seasonally adjusted 251,000.

Even with that increase, initial claims have been below 300,000 for 90 consecutive weeks, the longest streak since 1970.

The four-week moving average, which many economists believe is a more accurate gauge of the economy because of its lack of volatility, came in at 251,000 -- down 2,000 from the previous week.

The complete report is available on the DOL website.

Housing affordability was down slightly in the third quarter as rising home prices offset a dip in mortgage interest rates.

According to the National Association of Home Builders (NAHB/Wells Fargo) Housing Opportunity Index, 61.4 % of new and existing homes sold in the July-September period were affordable to families earning the U.S. median income of $65,700. In the previous three-month time frame, 62% of homes were affordable.

“Historically low interest rates and firming job growth are positive indicators that housing markets across the nation will continue to gradually improve,” said NAHB Chairman Ed Brady. “Home prices, however, continue to be affected by the rising costs of construction, both in terms of land and labor.”

The national median home price increased from $240,000 in the second quarter to $247,000 in the third quarter, as average mortgage rates slipped from 3.88% to 3.76% in the same period.

Most affordable markets

Elgin, Ill., was rated the nation’s most affordable major housing market, where 94.3% of all new and existing homes sold in third quarter were affordable to families earning the area’s median income of $82,500. Fairbanks, Alaska, was rated the nation’s most affordable smaller market, with 97.7% of homes affordable to families earning the median income of $93,800.

Rounding out the top five affordable major housing markets in respective order were Youngstown-Warren-Boardman, Ohio-Pa.; Scranton-Wilkes-Barre-Hazleton, Pa.; Indianapolis-Carmel-Anderson, Ind.; and Syracuse, N.Y.

Smaller markets joining Fairbanks at the top of the list included Monroe, Mich.; Binghamton, N.Y.; Wheeling, W.Va.-Ohio; and Davenport-Moline-Rock Island, Iowa-Ill.

Least affordable markets

For the 16th straight quarter, San Francisco-Redwood City-South San Francisco, Calif., was the nation’s least affordable major housing market. There, just 9.7% of homes sold in the third quarter were affordable to families earning the area’s median income of $104,700.

Other major metros at the bottom of the affordability chart were located in California. In descending order, they included Los Angeles-Long Beach-Glendale; Anaheim-Santa Ana-Irvine; San Jose-Sunnyvale-Santa Clara; and Santa Rosa.

Four of the five least affordable small housing markets were also in California. At the very bottom of the affordability chart was Salinas, where 17.6% of all new and existing homes sold were affordable to families earning the area’s median income of $63,500.

In descending order, other small markets at the lowest end of the affordability scale included Santa Cruz-Watsonville; Napa; San Luis Obispo-Paso Robles-Arroyo Grande; and Kahului-Wailuku-Lahaina, Hawaii.

July was another month of solid gains in home prices, according to the S&P CoreLogic Case-Shiller Indices, with the index covering all nine U.S. census divisions showing a 5.1% annual gain.

The 10-City Composite was up 4.2%, down from the 4.3% annual gain posted in June, while the 20-City Composite rise of 5.0% was down 0.1% from June.

The highest year-over-year gains among the 20 cities over each of the last six months came in Portland, Seattle, and Denver. Portland led the way in July with a year-over-year price increase of 12.4%, followed by Seattle at 11.2%, and Denver with a 9.4% advance. Nine cities reported greater price increases in the year ending July 2016 versus the year ending June 2016.

“The S&P CoreLogic Case-Shiller National Index is within 0.6% of the record high set in July 2006, said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “Seven of the 20 cities have already set new record highs. The 10-year, 20-year, and National indices have been rising at about 5% per year over the last 24 months. Eight of the cities are seeing prices up 6% or more in the last year.”

Month-over-month

Before seasonal adjustment, the National Index was up 0.7% from June. The 10-City Composite recorded a month-over-month increase of 0.5%, while the 20-City Composite was up 0.6%.

After seasonal adjustment, the National Index recorded a 0.4% month-over-month increase, the 10-City Composite was down 0.1%, and the 20-City Composite was unchanged.

After seasonal adjustment, 12 cities saw prices rise, two were unchanged, and six cities reported declines.

If you would like to buy a house but happen to work in California's Silicon Valley, you might have trouble, even on a tech company salary.

According to Coldwell Banker's latest ranking, the 10 most expensive housing markets in the U.S. are all located in California. Six are located in Silicon Valley.

“Silicon Valley has been at the forefront of innovation in the U.S. for years, with leading tech companies attracting some of the brightest entrepreneurial minds in the world,” said Coldwell Banker CEO Charlie Young. “Clearly, the amenities of the region are also impacting home prices.”

But for people who can live anywhere, or who are willing to relocate, there are still some enticing deals out there. And it isn't necessary to move to the middle of nowhere to find them.

While the average four bedroom, two bath home in Saratoga, Calif., goes for nearly $2.5 million, Coldwell Banker found the same type homes going for less than $250,000 in nearly 40% of the markets it serves.

Top 10 most affordable cities

Detroit

The Motor City has been through a very rough patch that includes bankruptcy, but in the last couple of years it has been on the upswing. Part of the draw has been bargain-priced real estate. In Coldwell Banker's survey, Detroit is the nation's most affordable housing market with an average home price of just $64,110.

Cleveland

Cleveland is another Rust Belt city on the comeback trail, and is now basking in the glow of an NBA championship. Start-up businesses are thriving, supported by a private initiative by Cleveland Cavaliers star Lebron James. Low prices for houses have helped draw Millennials back. The average four bedroom, two bath home goes for $73,073.

Park Forest, Ill.

Park Forest is a community of about 22,000 located south of Chicago that straddles Cook and Will counties. The average home price is $78,392.

Jamestown, N.Y.

Jamestown lies in the southwestern corner of New York near the Pennsylvania border. The city of 30,000 is an easy drive to Pittsburgh and offers natural beauty for an affordable price. The average home price is $88,891.

Utica, N.Y

While New York has a reputation for a high cost of living, the Coldwell Banker survey finds two of the state's cities among the 10 most affordable markets. Utica, just west of Syracuse, has a population of 62,225 and an average home price of $92,891.

Wilkes-Barre, Pa.

Pennsylvania also adds two housing markets to the list. Wilkes-Barre is city of 41,000 people, clustered with Scranton and Hazelton, convenient to both Philadelphia and New York. The average house goes for $94.436.

Scranton, Pa.

Scranton, one of Wilkes-Barre's partner cities, has a population of 76,000 and is home to the fictional Dunder-Mifflin paper company, of the TV sitcom “The Office.” The real life price of a home is $108,842.

Huntington, Ind.

Huntington, with a population of 17,000, is located southwest of Ft. Wayne. Its average four bedroom house goes for $105,614.

Augusta, Ga.

Augusta is in a beautiful part of the world, as evidenced each April when it becomes the center of the professional golf universe. A home in the home of The Masters goes for an average of $106,567.

Palatka, Fla.

Florida real estate prices have made a comeback since the housing crash, but you can still find bargains, especially if you look in Palatka, a town of 10,000 on the St. John's River. The average home there sells for $110,655.

Month after month it seems to be the same story. Home prices go up, even if sales for the month are flat, or even lower.

It's a trend that has been in place since the housing recovery began, and it has begun to affect affordability.

The National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI) released last week found that 62% of new and existing homes sold between the beginning of April and the end of June were affordable to families earning the median income of $65,700. That's down from 65% in the first quarter.

Nationally, the median home price increased $17,000, from $223,000 in the first quarter to $240,000 in the second quarter. Interest rates are below 4%, but that's not what's driving the dramatic price rise.

During the housing bubble, prices rose because almost anyone could qualify for a mortgage. The demand for housing sent prices skyrocketing to unsustainable levels.

Not enough homes for sale

Demand is also responsible for rising prices today, but for very different reasons than a decade ago. There simply are not enough homes for sale. Fewer existing homes and fewer new homes.

Jonathan Smoke, chief economist for realtor.com, says new home construction has failed to keep up with demand since the recovery. He doesn't expect to see that changing soon.

“Single-family is continuing to show gains, but the gains in permits are weaker than the gains in starts,” Smoke said in an email to ConsumerAffairs. “Builders are starting what they already permitted earlier this year but are not bullish about demand this fall and winter.”

New homes typically cost more than existing homes and housing experts say construction costs have gone up since the housing crash. For that reason, builders have largely focused on multi-family units and luxury single-family homes.

Smoke says the seasonally adjusted rate of permitting in July was not statistically significant. On a year-to-date basis, permits are up in every region but the Northeast.

Shrinking inventory

At the same time, there are fewer existing homes for sale. In its June existing home sales report, the National Association of Realtors (NAR) noted that inventory levels continue to decline. Total housing inventory at the end of the month was 2.12 million homes, nearly 6% fewer than a year ago. Inventory was at a 4.6-month supply, down form 4.7 months in May.

With supply and demand out of balance, the result is fewer renters can afford to buy. Those who can afford it may have difficulty finding a house they like.

Rising home prices outweighed falling mortgage rates when it came to housing affordability in the second quarter of the year.

The National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI) found that 62% of new and existing homes sold between the beginning of April and the end of June were affordable to families earning the U.S. median income of $65,700. In the first quarter it was 65%.

The national median home price increased from $223,000 in the first quarter to $240,000 in the second quarter. At the same time, average mortgage rates dipped from 4.05% to 3.88%.

“Though we have seen a modest drop in affordability in the second quarter, the HOI is still fairly high by historical standards,” said NAHB Chief Economist Robert Dietz. “Rising employment, favorable mortgage rates and increasing household formations will keep the housing market on a gradual, upward path during the rest of the year.”

Most and least affordable

For the third consecutive quarter, Youngstown-Warren-Boardman, Ohio-Pa., was rated the nation’s most affordable major housing market, with 91.1% of all new and existing homes sold in the second quarter affordable to families earning the area’s median income of $53,900.

Rounding out the top five affordable major housing markets in respective order were Scranton-Wilkes-Barre-Hazleton, Pa.; Syracuse, N.Y.; Harrisburg-Carlisle, Pa.; and Indianapolis-Carmel-Anderson, Ind.

Meanwhile, Kokomo, Ind., claimed the title of most affordable small housing market in the second quarter of 2016. There, 98.2% of homes sold during the second quarter were affordable to families earning the median income of $60,900.

Smaller markets joining Kokomo at the top of the list included Cumberland, Md.-W.Va.; Fairbanks, Alaska; Davenport-Moline-Rock Island, Iowa-Ill; and Monroe, Mich.

For the 15th quarter in a row, San Francisco-Redwood City-South San Francisco, Calif., was the nation’s least affordable major housing market. Just 8.5% of homes sold there were affordable to families earning the area’s median income of $104,700.

Other major metros at the bottom of the affordability chart were located in California. In descending order, they included Los Angeles-Long Beach-Glendale; Anaheim-Santa Ana-Irvine; San Jose-Sunnyvale-Santa Clara; and San Rafael.

California also claimed the five least affordable small housing markets. At the very bottom of the affordability chart was Santa Cruz-Watsonville, where 14.7% of all new and existing homes sold were affordable to families earning the area’s median income of $85,100.

Other small markets at the lowest end of the affordability scale included Salinas; Napa; San Luis Obispo-Paso Robles-Arroyo Grande; and Santa Maria-Santa Barbara.

“Firm job growth, historically low interest rates and healthy price appreciation in many markets are all positive signs that the housing recovery continues to move forward,” said NAHB Chairman Ed Brady. “At the same time, regulatory hurdles and rising costs for buildable lots and skilled labor continue to put upward pressure on the cost of building a home.”

Whether it's a house listed at $299,999 or a product sold on TV for “three easy payments of $19.95,” marketers have long resorted to “just below” pricing – setting the price just below a round number.

They've done it because they think it's effective. Just ask yourself how many times you bragged to a friend that you filled your gas tank for $1.99 a gallon, when in fact it was $1.99.9 a gallon – $2, for all practical purposes.

Turns out there is research to show this “just below” pricing actually works pretty well. Eli Beracha of Florida International University, who conducted the study with Michael J. Seiler, of The College of William & Mary, said that using this method means sellers can ask more for something without driving away buyers.

Their study looked at 1,000 buyers in Virginia who were considering 370,000 listings. The research team focused on the impact of pricing homes in round numbers as opposed to a price that was just below that number.

“On average, buyers are more attracted to a house priced at $199,000 than to a house priced at $200,000 and it appears that ‘just below’ pricing works out favorably for sellers in terms of their bottom line,” Beracha said.

Buyers end up paying more

In fact, the researchers maintain that dropping the price as little as $1 consistently yields a higher selling price. They say it can result in a buyer paying as much as $6,000 more on a $200,000 property.

“We tested the age-old debate concerning the best technique to price a home when listing it for sale,” Seiler said. “We find that using a price just below a round number works best, particularly in connection to the left-most digit in the price. So, $199,999 works better than $200,000.”

There is still some debate in the real estate industry about the effectiveness of this pricing, but sellers might want to take the research into consideration when putting their homes on the market.

Of course, buyers – not just of homes but of all products – should probably keep it in mind as well. When something is priced at $49.99, it's really $50. A home priced at $199,000 is really $200,000.

And any sale at a “just under” price will always be “just over” after you pay sales taxes, shipping, and other assorted fees that are always associated with any sale these days.

Home prices moved higher in June on both an annual and a month-over-month basis.

The CoreLogic Home Price Index (HPI) shows prices nationwide -- including distressed sales -- rose 5.7% year-over-year and 1.1% compared with May 2016.

“Mortgage rates dipped in June to their lowest level in more than three years, supporting home purchases,” said CoreLogic Chief Economist Dr. Frank Nothaft. “Local markets with strong economic growth have generally had stronger home-price growth. Among large metropolitan areas, Denver had the lowest unemployment rate and the strongest home-price appreciation.”

The CoreLogic HPI Forecast projects home prices will increase by 5.3% on a year-over-year basis from June 2016 to June 2017, and on a month-over-month basis by 0.6% from June 2016 to July 2016.

"Home prices continue to increase across the country, especially in the lower price ranges and in a number of metro areas," said Anand Nallathambi, president and CEO of CoreLogic. "We see prices continuing to increase at a healthy rate over the next year.”

Personal income and spending

From the government, word that consumers were earning more and spending it in June.

The Bureau of Economic Analysis (BEA) reports personal income inched ahead 0.2% or $29.3 billion, with disposable personal income (DPI) -- what you have left after taxes -- up $24.6 billion or 0.2%.

Personal consumption expenditures (PCE) rose $53.0 billion (0.4%).

Earning, spending and saving

June's increase in personal income came mainly from increases in private wages, salaries, and nonfarm proprietors’ income. These were partly offset by declines in personal dividend income and personal interest income.

The increase in spending primarily reflected increases in outlays for electricity and gas, healthcare services, and other nondurable goods that were partly offset by a drop in spending for new motor vehicles.

Personal saving was $732.0 billion in June, putting the personal saving rate -- personal saving as a percentage of disposable personal income -- at 5.3%, the same as May.

The complete report is available on the BEA website.

Home prices rose in May, but not at the clip we saw the month before.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine U.S. census divisions, was up 5.0% in May from the same month a year earlier. Within that measure, the 10-City Composite rose 4.4%% increase, down 0.3% from the gain posted the previous month, and the 20-City Composite reported a year-over-year gain of 5.2%, down from 5.4% in April.

The highest year-over-year gains among the 20 cities over each of the last four months were recorded in Portland, Seattle and Denver. In May, Portland led the way with a 12.5% year-over-year price increase, followed by Seattle at 10.7%, and Denver with a 9.5% increase. Eight cities reported greater price increases in the year ending May 2016 versus the year ending April 2016.

“Home prices continue to appreciate across the country,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “Overall, housing is doing quite well. In addition to strong prices, sales of existing homes reached the highest monthly level since

2007 as construction of new homes showed continuing gains.

Month-over-month

The National Index posted a month-over-month gain of 0.2% in May, with the 10-City Composite down 0.8%, and the 20-City Composite posting a 0.1% decline in May. Twelve cities saw prices rise, two cities were unchanged, and six cities saw prices fall.

Regional patterns seen in home prices are shifting. Blitzer notes that over the last year, the Pacific Northwest has been quite strong while prices in the previously strong spots of San Diego, San Francisco and Los Angeles saw more modest increases.

“The two hottest areas during the housing boom were Florida and the Southwest,” he said, adding that Miami and Tampa have recovered in the last few months while Las Vegas and Phoenix remain weak. “When home prices began to recover,” Blitzer added, “New York and Washington saw steady price growth; now both are among the weakest areas in the country.”

Another rise, albeit a small one, for the price of housing in May.

The Federal Housing Finance Agency (FHFA) reports its House Price Index (HPI) rose 0.2%, marking the third consecutive monthly advance. At the same time, the April increase was revised higher -- from 0.2% to 0.3%.

On a year-over-year basis, prices were up 5.6% from May 2015.

For the nine census divisions, seasonally adjusted monthly price changes from April to May ranged from -1.3% in the New England division to +1.2% in the Mountain division. The 12-month changes were all positive -- ranging from +3.4% in the Middle Atlantic division to +8.5% in the Mountain division.

The monthly HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.

The complete report is available on the FHFA website.

Jobless claims

Also from the government, word that first-time applications for state unemployment benefits remained below 300,000 for a 72nd consecutive week, the longest streak since 1973.

The Department of Labor (DOL) reports initial jobless claims were down by 1,000 in the week ending July 16, to a seasonally-adjusted 253,000 -- down from the previous week's unrevised level.

The four-week moving average, considered by many economists to be a more accurate gauge of the labor market, fell by 1,250 from the previous week's unrevised figure to 257,750.

The full report may be found on the DOL website.

If you own a home, chances are good that you saw it rise in value -- again.

Property information provider CoreLogic reports housing prices were up in May both year-over-year and month-over-month.

The CoreLogic Home Price Index (HPI) jumped by 5.9% from the same month a year ago, and was up 1.3% from April.

“Housing remained an oasis of stability in May with home prices rising year over year between 5% and 6% for 22 consecutive months,” said CoreLogic Chief Economist Dr. Frank Nothaft. “The consistently solid growth in home prices has been driven by the highest resale activity in nine years and a still-tight housing inventory.”

Looking ahead

The CoreLogic HPI Forecast projects a year-over-year rise of 5.3% for May 2017, and a 0.8% increase from May 2016 to June 2016.

The forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“Housing remained an oasis of stability in May with home prices rising year over year between 5% and 6% for 22 consecutive months,” said CoreLogic Chief Economist Dr. Frank Nothaft. “The consistently solid growth in home prices has been driven by the highest resale activity in nine years and a still-tight housing inventory.”

“Price appreciation continues to be fairly broad-based across the U.S.,” said Anand Nallathambi, president and CEO of CoreLogic. “From a regional perspective, the Pacific Northwest continues to be the hottest area for home-price growth, with Oregon and Washington leading the way. The recent turbulence in financial markets should lead to modestly lower mortgage rates, which will provide even more support to the steadily improving real estate recovery.”

House prices rose in value across the U.S. in April, but at a slower pace on both a year-over-year and month-over-month basis.

According to the S&P/Case-Shiller National Home Price Index (HPI), which covers all nine U.S. census divisions, prices posted a 5.0% annual gain, compared with an advance of 5.1% the previous month. The 10-City Composite was up 4.7%, versus 4.8% in March, and the 20-City Composite reported a year-over-year gain of 5.4% -- from 5.5% from the prior month.

Portland led the way with a year-over-year price increase of 12.3%, followed by Seattle at 10.7% and Denver with a 9.5% gain. Nine cities reported greater price increases in the year ending April 2016 versus the year ending March 2016.

The HPI recorded a month-over-month gain of 1.0% in April, with the10-City Composite up 1.0% and the 20-City Composite rising 1.1%.

Uncertainty ahead

”The housing sector continues to turn in a strong price performance with the S&P/Case-Shiller National Index rising at a 5% or greater annual rate for six consecutive months,” said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “The home price increases reflect the low unemployment rate, low mortgage interest rates, and consumers’ generally positive outlook.”

Blitzer notes, however, that the outlook is not without a lot of uncertainty and some risk. “Last week’s vote by Great Britain to leave the European Union is the most recent political concern while the U.S. elections in the fall raise uncertainty and will distract home buyers and investors in the coming months,” he said.

In addition, a closer look at home price data also hints at possible softness. According to Blitzer, “Seasonally adjusted figures in the report show that three cities saw lower prices in April compared to only one city in March. Among the 20 cities, 16 saw either declines or smaller increases in monthly prices in the seasonally adjusted numbers.”

A leading measure of U.S. home prices shows increases in value continued during March.

On a year-over-year basis, the S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, posted a 5.2% gain with the 10-City Composite and the 20-City Composites’ year-over-year gains unchanged at 4.7% and 5.4%, respectively, from the previous month.

The highest gains among the 20 cities with another month of annual price increases came in Portland, Seattle, and Denver. Portland led the way with a 12.3% surge, followed by Seattle at 10.8%, and Denver with an increase of 10.0%. Ten cities reported greater price increases in the year ending March 2016 versus the year ending February 2016.

“The economy is supporting the price increases with improving labor markets, falling unemployment rates and extremely low mortgage rates,” said David M. Blitzer, managing director & chairman of the Index Committee at S&P Dow Jones Indices.

“Another factor behind rising home prices is the limited supply of homes on the market. The number of homes currently on the market is less than 2% of the number of households in the U.S. -- the lowest percentage seen since the mid-1980s.”

Month-over-month

The National Index was up 0.7% in March, with the 10-City Composite recording a 0.8% month-over-month increase while the 20-City Composite rose 0.9%. Six cities saw prices rise, one city was unchanged, and prices dropped in 13 cities.

The year-long housing market narrative has been one of rising prices, which has been cheered as a good economic sign.

After all, the housing crash of 2008-09 left millions of homeowners underwater and led to widespread foreclosures.

But real estate marketplace Zillow reports home prices are now rising faster than anyone expected. And it isn't due to a robust economy – it's because the supply of homes for sale has shrunk, making the homes that are on the market worth more.

In its existing home sales report for April, the National Association of Realtors (NAR) said the median price for all types of homes was $232,500 – a gain of 6.3% year-over-year.

Zillow uses a different metric to measure home prices, and it places the median home price in the U.S. significantly less, at $187,000. Still, that's a 5% increase over the last 12 months and may be a cause for concern.

Worries

"The temporary relief from mortgage rates currently near three-year lows has helped preserve housing affordability this spring, but there's growing concern a number of buyers will be unable to find homes at affordable prices if wages don't rise and price growth doesn't slow," said Lawrence Yun, NAR's chief economist.

The Zillow report shows a wide gap in home prices, depending on the market. While prices seem to be rising in most markets, the median price appears to be reaching bubble proportions in some markets faster than others.

For example, in Dallas-Fort Worth, the median home price gained 12.6% in the last 12 months, but is only $183,000. San Francisco, meanwhile, saw a 10% appreciation in the median home price, which is now $806,800.

Wide price variations

Using Zillow's national median home value of $187,000 as a baseline, the median home in Dallas is 2% below the national average. However, the median home in San Francisco is more than four times the national average.

Denver, the nation's hottest housing market, saw the median home value rise 15.2% in the last year to $336,600 – nearly twice the national average. The median home price in Los Angeles is $567,700, more than three times the national average.

But the median home prices in Houston, Detroit, and Atlanta remain well below Zillow's national average, yet values grew in all three metros last year by at least 6%.

If a housing bubble is forming, it isn't universally recognized. People in Atlanta aren't seeing it. But home buyers in markets where inventory is low and high-income jobs are plentiful certainly are.

Prices for houses across the U.S. were up during the first three months of the year, marking the 19th consecutive quarterly increase.

According to the Federal Housing Finance Agency (FHFA) House Price Index (HPI), prices rose 1.3% in the first quarter of 2016 and were up 5.7% from the period a year earlier.

The HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.

"While the overall appreciation rate was robust in the first quarter, home price appreciation was somewhat less widespread than in recent quarters," said FHFA Supervisory Economist Andrew Leventis. "Twelve states and the District of Columbia saw price declines in the quarter -- the most areas to see price depreciation since the fourth quarter of 2013. Although most declines were modest, such declines are notable given the pervasive and extraordinary appreciation we have been observing for many years."

Report highlights

• Home prices rose in every state between the first quarter of 2015 and the first quarter of 2016. The top five states in annual appreciation were Oregon (11.8%), Florida (11.2%), Washington (10.9%), Nevada (9.4%), and Colorado (9.0%).
• Among the 100 most populated metropolitan areas in the U.S., annual price increases were greatest in the West Palm Beach-Boca Raton-Delray Beach, Fla., where prices increased by 16.7%. Prices were weakest in El Paso, Texas, where they fell 2.8%.
• Of the nine census divisions, the Pacific division experienced the strongest increase in the first quarter, posting a 1.9% quarterly increase and an 8.1% increase since the first quarter of last year. House price appreciation was weakest in the Middle Atlantic division, where prices rose 0.6% from the last quarter.

The complete report is available on the FHFA website.

Home prices were on the rise again in March according to CoreLogic.

The provider of property information, analytics and data-enabled services says its Home Price Index (HPI) shows home prices nationwide -- including distressed sales -- posted a year-over-year gain of 6.7% and were up 2.1% from February.

“Home prices reached the bottom five years ago, and since then have appreciated almost 40%,” said Anand Nallathambi, president and CEO of CoreLogic. “The highest appreciation was in the West, where prices continue to increase at double-digit rates.”

Looking ahead

The CoreLogic HPI Forecast indicates home prices will rise 5.3% on a year-over-year basis from March 2016 to March 2017, and 0.7% from March 2016 to April 2016.

The forecast is a projection of home prices using the CoreLogic HPI and other economic variables.

“Housing helped keep U.S. economic growth afloat in the first quarter of 2016 as residential investment recorded its strongest gain since the end of 2012,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Low interest rates and increased home building suggest that housing will continue to be a growth driver.”

The 55+ housing market

In other housing news, the National Association of Home Builders (NAHB) says builder confidence in the single-family 55+ housing market remained in positive territory for the first quarter of 2016

Despite a six-point dip -- from 61 to 55 -- in the NAHB 55+ Housing Market Index from the previous quarter, this is the eighth consecutive quarter with a reading above 50. An index number above 50 indicates that more builders view conditions as good than poor.

"Although builder sentiment in the 55+ housing sector is down slightly from its peak, overall confidence is still in positive territory," said Jim Chapman, chairman of NAHB's 55+ Housing Industry Council. "Builders for the 55+ market are doing quite well in some areas across the country, while others are experiencing challenges that are hindering production."

San Francisco has always been an expensive real estate market. Lots of people want to live there.

But in the last five years, San Francisco has gotten to be unaffordable for most people. The Home Value Forecast, produced by Pro Teck Valuation Services, explored some of the reasons.

It found that, as the economy recovered from the Great Recession, San Francisco created 500,000 new jobs. These were the kinds of jobs politicians like to call “good jobs.” Mostly involving technology, they command big salaries.

At the same time, the Great Recession and resulting housing crash resulted in a plunge in home building activity in the region, where land is at a premium. So a half-million new jobs and almost no expansion in housing inventory when supply and demand is way out of balance.

That's resulted in a housing market where the average home lists for $1.2 million, and there is no shortage of buyers.

Long commute

The Forecast recounts the tale of one San Francisco worker who could barely afford a one-bedroom apartment in the metro area. Instead, he rented a two-bedroom apartment in Las Vegas, Nev., commuting to San Francisco four days a week. He estimates his savings at $1,124 per month.

Urban planners are concerned about what this is doing to the character of the city, not to mention the practical question of where the city's vital workers, who don't command high six-figure salaries, are going to live.

“Gentrification, or the influx of capital and higher-income, higher-educated residents into working-class neighborhoods, has already transformed about 10% of Bay Area neighborhoods,” writes the Urban Displacement Project, at the University of California Berkley.

Widespread displacement

Its authors found displacement was forcing residents to move out of 48% of Bay Area neighborhoods because prices had gotten too high. It said these neighborhoods were about evenly divided between low income enclaves and those populated by moderate to high-income residents.

The Home Value Forecast reports many of these displaced residents, who work in San Francisco, are moving to Antioch, Calif. For most, it means a daily one-way commute of more than one hour, landing it on the list of the 50 worst commutes in America.

Real estate marketplace Zillow recently reported that housing markets that provide the best opportunities for advancement – places like San Francisco and Seattle – are now unaffordable for low income consumers who could benefit most.

In two thirds of the metros that Zillow measured, renters had to spend more of their income on rent than the historical average. In major job markets like the Bay Area, New York, and Los Angeles, it takes 40% of the median income to pay the median rent.

It's worse in Los Angeles, where he median worker has to spend nearly half of their income on rent.

Home values across the U.S. posted year-over-year and month-over-month gains in February.

However, the S&P/Case-Shiller U.S. National Home Price Index (HPI) shows the rate of increase was slowing.

Year-over-Year

The National HPI, covering all nine U.S. census divisions, recorded a 5.3% annual gain in February, the same as in January. The slowdowns came in the 10-City Composite, which was up 4.6%, compared with January's advance of 5.0% from the same month in 2015.

Additionally, the 20-City Composite’s year-over-year gain was 5.4%, versus 5.7% the month before. Among those 20 cities, Portland (+11.9%), Seattle (+11.0%), and Denver (+9.7%) posted the biggest year-over-year gains. Seven cities reported greater price increases in the year ending February 2016 than in the year ending January 2016.

”Home prices continue to rise twice as fast as inflation, but the pace is easing off in the most recent numbers,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices.

“The year-over-year figures for the 10-City and 20-City Composites both slowed and 13 of the 20 cities saw slower year-over-year numbers compared to last month.”

Month-over-month

Before seasonal adjustment, the National HPI posted a gain of 0.2% month-over-month in February, with the 10-City up just 0.1% and the 20-City Composite posting a 0.2% increase. After seasonal adjustment, the National HPI recorded a 0.4% month-over-month increase.

The 10-City Composite was up 0.6% and the 20-City Composite reported a 0.7% month-over-month increase. Fourteen of 20 cities reported increases in February before seasonal adjustment; after seasonal adjustment, only 10 cities increased for the month.

“The slower growth rate is evident in the monthly seasonally adjusted numbers,” Blitzer noted, pointing out that six cities, "experienced smaller monthly gains in February compared to January, when no city saw growth." Among the six were Seattle, Portland OR, and San Diego, all of which were very strong last time.

Another rise for home prices in February on both a year-over-year and month-over-month basis

Property information provider CoreLogic reports that home prices nationwide -- including distressed sales -- increased 6.8% in February and were up 1.1% from January.

“Home prices continue to rise across the U.S. with every state posting year-over-year gains during the last 12 months,” said Anand Nallathambi, president and CEO of CoreLogic. “Improved economic conditions and tight inventories continue to drive exceptionally strong gains in many markets, especially for homes priced below $500,000.”

Looking ahead

The CoreLogic Home Price Index Forecast projects an increase of 5.2% on a year-over-year basis from February 2016 to February 2017, and on a month-over-month basis a more modest 0.6% from February to March.

“Fixed-rate mortgage rates dropped more than one-quarter of a percentage point in the first three months of 2016, and job creation averaged 209,000 over the same period,” said CoreLogic Chief Economist Dr. Frank Nothaft. “These economic forces will sustain home purchases during the spring and support the 5.2% home price appreciation CoreLogic has projected for the next year.”

Home prices across the country rose over the last 12 months.

On a year-over-year basis, the S&P/Case-Shiller U.S. National Home Price Index (HPI), covering all nine U.S. census divisions, was up 5.4% in January.

The 10-City Composite rose 5.1% for the year., while the 20-City Composite’s year-over-year gain was 5.7%. After seasonal adjustment, the National, 10-City Composite, and 20-City Composite rose 0.5%, 0.8%, and 0.7%, respectively, from the prior month.

West leads the year-over-year advance

Portland, Seattle, and San Francisco reported the highest year-over-year gains among the 20 cities, with another month of double digit annual price increases. Portland was on top with an 11.8% year-over-year price increase, followed by Seattle with 10.7%, and San Francisco with a 10.5% increase.

Eleven cities enjoyed greater price increases in the year ending January 2016 versus the year ending December 2015. Phoenix posted an annual gain of 6.1% in January 2016 versus 6.3% in December 2015, ending its streak of 12 consecutive months of increasing annual gains. The western part of the country saw the largest price gains in the past year; the northeast is the weakest region.

Month-over-month

Before seasonal adjustment, the National Index, the 10-City Composite, and the 20-City Composite all were unchanged in January. After seasonal adjustment, all three composites reported strong advances.

Eleven of 20 cities reported increases in January before seasonal adjustment; after seasonal adjustment, all 20 cities increased for the month.

Inventory worries

“Home prices continue to climb at more than twice the rate of inflation,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “The low inventory of homes for sale -- currently about a five month supply -- means that would-be sellers seeking to trade-up are having a hard time finding a new, larger home.

The recovery of the sale and construction of new homes has lagged the gains seen in existing home sales, but this may be starting to change. Starts of single family homes in February were the highest since November 2007, and the single-family-home share of total housing starts was 70% in February, up from a low of 57% in June 2015.

“While low inventories and short supply are boosting prices,” Blitzer said, “financing continues to be a concern for some potential purchasers, particularly young adults and first time home buyers. The issue is availability of credit for people with substantial student or credit card debt.”

Blitzer said one hopeful sign is that the home ownership rate -- at 63.7% in the 2015 fourth quarter -- may be turning around. It is up slightly from 63.5% in the 2015 second quarter but far below the 2004 high of 69.1%.”

Prices for homes were on the rise again in January.

The Federal Housing Finance Agency (FHFA) reports its monthly House Price Index (HPI) was up a seasonally adjusted 0.5% from the month before.

At the same time, the FHFA revised its December figures to show a gain of 0.5% instead of the 0.4% advance it reported initially.

Earlier this month, CoreLogic reported a month-over-month price gain of 1.3%

Regional breakdown

For the nine census divisions, seasonally adjusted monthly price changes from December 2015 to January 2016 ranged from -1.0% in the Middle Atlantic division to +1.7% in the South Atlantic division.

The 12-month changes were all positive, ranging from +1.7% in the Middle Atlantic division to +8.9% in the South Atlantic division.

The FHFA monthly HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.

The year over year increase in January was 6.0%.

The full report may be found on the FHFA website.

January was a good month for homeowners as prices rose on both a year-over-year and month-over-month basis.

Property information, analytics and data-enabled services provider CoreLogic reports its Home Price Index (HPI) shows home prices nationwide -- including distressed sales -- increased year over year by 6.9% and was up 1.3% from December.

“While the national market continues to steadily improve, the contours of the home price recovery are shifting,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The northwest and Rocky Mountain states have experienced greater appreciation and account for four of the top five states for home price growth.”

Looking ahead

The CoreLogic HPI Forecast indicates home prices will jump 5.5% from January 2016 to January 2017, and 0.5% from January to February.

“Heading into the spring buying season, home prices continue to rise across much of the country,” said Anand Nallathambi, president and CEO of CoreLogic. “With rates staying low for now and continued solid job and income growth, the spring buying season is shaping up to be a good one.”

The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

The prices of houses in the U.S were up in the final three months of last year for the 18th quarter in a row.

According to the Federal Housing Finance Agency (FHFA) House Price Index (HPI), prices were up 1.4% from the third quarter of last year and 5.8% from the fourth quarter of 2014.

"Instability in financial markets did not seem to put much of a drag on home prices in the fourth quarter," said FHFA Supervisory Economist Andrew Leventis. "The fourth quarter 1.4% increase for the U.S. was in line with the extremely steady -- but historically elevated -- appreciation rates we have been observing for several years now."

The HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.

While the purchase-only HPI posted a year-over-year gain of 5.8%, prices of other goods and services fell 0.8%. The inflation-adjusted price of homes rose approximately 6.7% over the latest year.

Report highlights

• Home prices rose in every state and in the District of Columbia between the fourth quarter of 2014 and the fourth quarter of 2015. The top five states in annual appreciation were: 1) Nevada 12.7%; 2) Colorado 10.9%; 3) Idaho 10.7%; 4) Washington 10.7%; and 5) Oregon 10.6%.
• Among the 100 most populated metropolitan areas in the U.S., fourth-quarter price increases were greatest in the San Francisco-Redwood City-South San Francisco, Calif., metropolitan statistical areas district, where prices increased by 20.7%. Prices were weakest in New Haven-Milford, Connecticut, where they fell 1.5%.
• Of the nine census divisions, the Pacific division experienced the strongest increase in the fourth quarter, posting a 2.1% quarterly increase and an 8.0% advance since the fourth quarter of 2014. House price appreciation was weakest in the Middle Atlantic division, where prices rose just 0.6% from the previous quarter.

The full report may be found on the FHFA website.

Jobless claims

In other economic news, first-time applications for state unemployment benefits moved sharply higher last week.

The Department of Labor (DOL) reports seasonally adjusted initial claims totaled 272,000 in the week ending February 20, -- up 10,000 from the previous week.

Even with that increase, which was not affected by any special factors, the number of claims remains at the lower end of the 250,000-300,000 range that has prevailed since July 2014.

The four-week moving average, which lacks the weekly tally's volatility and is seen by economists as a more accurate gauge of the labor market, was 272,000, down 1,250 from the previous week.

The complete report is available on the DOL website.

The U.S. housing market appeared to cool off during the last three months of 2015, but that didn't stop home prices from going up. However, the report from the National Association of Realtors (NAR) suggests homes in metropolitan areas, rather than rural America, saw the most gains.

The report shows that the median existing single-family home price increased in 81% of NAR's measured markets, down from 87% in the third quarter. Still, that might not be bad considering sales of existing homes fell 5.4% during the period.

The disparity might be explained by a continued decline in the number of homes on the market.

Unshakeable trend

"Even with slightly cooling demand, the unshakeable trend of inadequate supply in relation to the overall pool of prospective buyers inflicted upward pressure on home prices in several metro areas," NAR chief economist Lawrence Yun said in a release.

The result, says Yun, is that a number of qualified buyers are being shut out of the housing market if they happen to live in the top job producing, but increasingly expensive, parts of the country – especially on the West Coast and parts of the South.

"Without a significant ramp-up in new home construction and more homeowners listing their homes for sale, buyers are likely to see little relief in the form of slowing price growth in the months ahead," Yun said.

A consumer who wanted to buy a single-family home at the national median price, putting 5% down, would need an income of $49,535. But first he or she would need to find a desirable home for sale. Increasingly, that's getting harder to do.

Decline in number of for sale signs

At the end of the fourth quarter, there were 1.79 million existing homes available for sale, down from 1.86 million homes for sale at the end of the fourth quarter in 2014. The average supply during the fourth quarter was 4.6 months – down from 4.9 months a year ago.

This is creating a strong seller's market, especially in hot metro areas. Great if you're trying to sell your home – not so great if you want to buy.

Nashville, Tennessee is one of the hot housing markets where affordability is slipping away. Christie Wilson, CEO of The Wilson Group Real Estate Services, says parts of the Nashville area have become “micro-markets” and are experiencing what she calls a mini-bubble.

"The lack of inventory continues to drive prices up in certain price ranges and certain neighborhoods that have those price points, such as anything under $350,000," she said in an interview with the Nashville Tennessean. "But there is a lot of inventory in higher price points, and so there very well could be a pricing correction in the future."

Real estate marketplace Zillow recently reported that urban home values have been rising faster than those in suburban areas. It says the shift reflects demographic trends of Millennials delaying family life and choosing condos, and shifting preferences, as people seek walkable neighborhoods with urban amenities.  

Housing prices continue their rise with no end in sight for the foreseeable future.

The CoreLogic Home Price Index (HPI) shows house prices nationwide -- including distressed sales – rose 6.3% in December from the same time a year earlier. In addition, prices were up 0.8% from November.

Distressed sales include short sales and real estate-owned transactions.

“Nationally, home prices have been rising at a 5 to 6% annual rate for more than a year,” said Dr. Frank Nothaft, chief economist for CoreLogic. “However, local-market growth can vary substantially from that. Some metropolitan areas have had double-digit appreciation, such as Denver, Colorado and Naples, Florida, while others have had price declines, like New Orleans, Louisiana and Rochester, New York.”

Looking ahead

The CoreLogic HPI Forecast indicates home prices will increase by 5.4% on a year-over-year basis from December 2015 to December 2016, and on a month-over-month basis home prices are expected to increase 0.2% from December 2015 to January 2016.

“Higher property valuations appear to be driving up single-family construction as we head into the spring. Additional housing stock, especially in urban centers on the coasts such as San Francisco, could help to temper home price growth in the longer term,” said Anand Nallathambi, president and CEO of CoreLogic. “In the short and medium term, local markets with strong employment growth are likely to experience a continued rise in home sales and price growth well above the U.S. average.”

Suburban living used to come with a higher price tag than city living. The split-level home with a porch and a big backyard may as well have been the spokesperson for the American dream.

But it seems more home buyers are coveting city life these days, favoring condos in walkable, amenity-rich neighborhoods over the quiet life in suburbia. This shift in preferences has led to a two percent increase in the value of urban homes, according to Zillow.

As homes in urban areas become increasingly more desirable, experts believe we may soon see the very nature of the suburbs changing.

Reflects shifting desires

Particularly in top-tier cities with young populations -- such as Boston, Seattle, and Washington, D.C. -- home buyers are looking to be part of a dense, walkable neighborhood close to their workplace.

Experts say this trend may lead to the urbanization of suburbia.

“In the future, this lifestyle trend will change some suburbs as we know them,” said Zillow Chief Economist Dr. Svenja Gudell. “They'll start to feel more urban as buyers move further from city centers in search of affordable housing in communities that still feel urban."

Recent phenomenon

Since 2000, home prices in urban centers have grown 50% faster than in their surrounding metro area, notes City Observatory.

In 2013, the average urban home was worth 1.2 percent less than the average home in the suburbs, according to Zillow data. The recent shift, analysts note, may have something to do with the aging population. 

Older people are far less likely to live in urban neighborhoods (just 17% of the largest segment of Boomers do, according to Trulia). And millennials, who are entering peak age for urban living while also delaying starting families, have also contributed to the rise in urban home prices. 

With city homes becoming more sought after, new data indicates that people are willing to pay much more for much less if it's where they want to live.

On a per-square-foot basis, home values in urban areas are way up, according to new data. In Washington, D.C., for example, urban homes in 1996 cost 6% more per square foot than suburban homes. Today, they cost 41% more per square foot.

Home prices in the U.S. continued to rise in November, according to two widely watched measures of prices.

In the first, the S&P/Case-Shiller Home Price Indices (HPI) show that prices posted a year-over-year gain of 5.3% in November, following a 5.1% increase in October.

The 10-City Composite was up 5.3% , while the 20-City Composite’s year-over-year gain was 5.8%.

Portland, San Francisco, and Denver continue to report the highest year over year gains among the 20 cities with another month of double digit annual price increases. Portland led the way with an 11.1% year-over-year price increase, followed by San Francisco with 11.0% and Denver with a 10.9% increase.

Fourteen cities reported greater price increases in the year ending November 2015 versus the year ending October 2015. Phoenix had the longest streak of year-over-year increases, reporting a gain of 5.9% in November -- the twelfth consecutive increase in annual price gains. Detroit posted a 6.3% year-over-year price, the largest annual increase this month.

Month-over-month

Before seasonal adjustment, the HPI was up 0.1% month-over-month in November. The 10-City Composite was unchanged, while the 20-City Composite reported gains of 0.1% month-over-month. After seasonal adjustment, the HPI, along with the 10-City and 20-City Composites, all increased 0.9% month-over-month in November.

Fourteen of 20 cities reported gains in November before seasonal adjustment; after seasonal adjustment, all 20 cities increased for the month.

“Home prices extended their gains, supported by continued low mortgage rates, tight supplies and an improving labor market,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “Sales of existing homes were up 6.5% in 2015 vs. 2014, and the number of homes on the market averaged about a 4.8 months’ supply during the year; both numbers suggest a seller’s market.”

Home prices continue to recover from the collapse that began before the recession of 2007-2009 and continued until 2012. Three cities -- Dallas, Denver, and Portland, Ore., -- have reached new all-time highs; San Francisco is even with its earlier peak and Charlotte N.C., is less than 1% below its previous peak.

The S&P/Case-Shiller National HPI is about 4.8% below the peak it set in July 2006, and 29.2% above the bottom it touched in January 2012.

FHFA HPI

​Separately, the Federal Housing Finance Agency's (FHFA) monthly HPI was up 0.5% in November on a seasonally adjusted basis from the previous month. The previously reported 0.5% gain in October was unchanged.

For the nine census divisions, seasonally adjusted monthly price changes from October 2015 to November 2015 ranged from -0.4% in the West South Central division to +1.8% in the Mountain division.

The 12-month changes were all positive, ranging from +2.6% in the Middle Atlantic division to +10.0% in the Mountain division.

The FHFA monthly HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. From November 2014 to November 2015, house prices were up 5.9%. The index levels for October and November 2015 exceeded the prior peak level from March 2007.

The complete report is available on the FHFA website.

Looking for a home that will quickly appreciate in values? Yes, good schools are important, but grocery stores may be even more influential.

Real estate marketplace Zillow reports homes increase in value faster if they are close to a Trader Joe's or Whole Foods. These are stores favored by Millennials and higher-income consumers.

Zillow says it found that between 1997 and 2014, homes near the two grocery chains were consistently worth more than the median U.S. home. At the end of 2014, homes within a mile of either store were worth more than twice as much as the median home in the rest of the country.

"Like Starbucks, the stores have become an amenity in their own right – a signal to the home-buying public that the neighborhood they're located in is desirable, perhaps up-and-coming, and definitely improving," Zillow Group Chief Economist Stan Humphries said in a release.

Boosts lagging neighborhood

Zillow concludes that these two stores can actually drive home prices. All it takes is for one to open in a neighborhood that has lagged the rest of the community in value and, voila, the neighborhood starts to take off.

The observation is contained in a book by Humphries and Zillow Group CEO Spencer Rascoff. The contention draws on Zillow's 10-year history collecting and analyzing real estate data.

"The grocery store phenomenon is about more than groceries," said Rascoff. "It says something about the way people want to live – in the type of neighborhood favored by the generations buying homes now. Today's homebuyers seek things in neighborhoods that weren't even in real estate agents' vocabularies a generation ago: walkability, community, new urbanism – and maybe we should add words like sustainable seafood and organic pears."

It's not a fluke, the authors insist. Home values are definitely linked to proximity to the two popular grocery stores.

Here's what Zillow said it learned: the median home within a mile of a future Whole Foods store appreciates more slowly than other homes in the same city before the store opens.

But once it is announced that one of these stores is moving into a neighborhood, the trend flips. Homes near the future site begin to appreciate. After the store opens, the appreciation picks up momentum.

10% gain

Two years after a Trader Joe's opened, the median home within a mile of the store had gone up 10% more than homes in the city as a whole over the previous year.

The trend could mean a couple of things. First, it might mean the two companies are very good at picking real estate, choosing locations that are under-valued but about to pop.

It could also mean that the two companies themselves are responsible for driving real estate higher. Trendy consumers – and they are often the ones with the most money – want to live near trendy stores.

Whatever the reason, a savvy homebuyer might take the locations of these stores into account when choosing a place to live.

This looks to be a good year for the housing industry, according to economists speaking at the National Association of Home Builders (NAHB) International Builders’ Show in Las Vegas.

“There are a number of positive indicators that provide solid evidence this will be a good year for housing and the economy,” said NAHB Chief Economist David Crowe. They include a firming economy, solid job growth, rising consumer confidence, higher household formations, and pent-up demand.

Private sector job growth has been averaging 240,000 per month over the past two years, Crowe noted, while GDP growth is expected to climb slightly above last year’s level. Consumer confidence is also nearly back to its pre-recession peak.

However, there may be some rough patches. Builders report their top concerns in the year ahead include the cost and availability of developed lots and labor, federal environmental regulations, policies which they say are making it more expensive and difficult to build homes, and building materials prices.

Single-family gains projected

The NAHB is forecasting 1.26 million total housing starts in 2016 -- up 13.4% from 2015.

Single-family production is expected to reach 840,000 units this year, an 18% increase from last year. The NAHB is using the 2000-2003 period, when single-family starts averaged 1.34 million units on an annual basis, as a healthy benchmark. The housing recovery will see single-family starts steadily climb from 55% of normal production at the end of the third quarter of 2015 all the way up to 87% of normal production by the end of 2017.

On the multifamily side, the NAHB is anticipating 417,000 starts in 2016, up 5% from last year.

Meanwhile, residential remodeling activity is expected to register a 1.1% advance over 2015.

A bright regional outlook – with one exception

Below the national numbers, Nationwide Insurance Chief Economist David Berson said most regional housing markets look healthy.

Labor market conditions, a key driver of housing demand, are strong in many metropolitan statistical areas (MSAs) -- supporting faster household formations and boosting local housing activity through rising incomes. These factors indicate that most of the 400 local housing markets “should see sustained growth in the coming year,” Berson said.

With the unemployment rate declining in 90% of MSAs over the past year, Berson said housing fundamentals are the strongest in over a decade, a trend supported by the labor market, demographics, and consumer preference to own.

However, he noted that many MSAs with strong ties to energy exploration and production in states including Louisiana, Texas, Wyoming, and South Dakota are expected to see limited housing expansion in the near term, as low oil prices are reducing employment.

Mortgage rates: “cheap” to low

CoreLogic Chief Economist Frank Nothaft foresees solid fundamentals for housing in 2016.

He calls 30-year fixed-rate mortgages running at or below 4% during the past year “cheap,” but notes that rates are expected to gradually rise one-quarter to one-half a percentage point this year -- up to 4.5%, going from what he calls, “cheap to low.”

Nothaft added that overall home sales will rise 4-5% this year, led by a 13% gain for new home sales, with sales volume and growth strongest in the South and West. “There is stronger growth in households, population and demand for new housing” in these regions, he said.

He predicts prices will post a roughly 4-5% gain this year from the 2015 level and will reach the 2006 peak by mid-2017.

And, while tight mortgage credit for consumers is expected to ease slowly this year, it will remain relatively tight compared with 15-20 years ago.

Once again, home prices rose on both a year-over-year and month-over-month basis during November.

CoreLogic reports its Home Price Index (HPI) shows prices nationwide -- including distressed sales -- jumped 6.3% in November 2015 from the same month a year earlier. There was also a month-over-month gain of 0.5% from October.

Distressed sales include real estate-owned (REO) and short sales.

“Many factors, including strong demand and tight supply in many markets, are contributing to the long-sustained boom in prices and home equity which is a very good thing for those owning homes,” said Anand Nallathambi, president and CEO of CoreLogic. “On the flip side, prices have outstripped incomes for several years in a number of regions so, as we enter 2016, affordability is becoming more of a constraint on sales in some markets.”

Looking ahead

The CoreLogic HPI Forecast indicates home prices will increase by 5.4% from November 2015 to November 2016, and remain flat from November 2015 to December 2015.

The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“Heading into 2016, home price growth remains in its sweet spot as prices have increased between 5 and 6% on a year-over-year basis for 16 consecutive months,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Regionally we are beginning to see fissures, with slowdowns in some Texas and California markets, but the northwest and southeast remain on solid footing.”

The price of homes posted a slightly stronger year-over-rear increase in October than we saw during the previous month. Prices also rose on a month-over-month basis.

Year-over-year

The S&P/Case-Shiller U.S. National Home Price Index (NHPI), covering all nine U.S. census divisions, was up 5.2% from October 2014. The annual increase for September over September was 4.9%.

The 10-City Composite increased 5.1% in the year to October versus 4.9% previously, while the 20-City Composite’s year-over-year gain was 5.5% compared with 5.4% in September.

San Francisco, Denver, and Portland continue to report the highest year-over-year gains among the 20 cities with another month of double-digit price increases of 10.9% for all three. Twelve cities reported greater price increases in the year ending October 2015 versus the year ending September 2015.

Phoenix had the longest streak of year-over-year increases, reporting a gain of 5.7% in October 2015 -- the eleventh consecutive increase in annual price gains.

“Generally good economic conditions continue to support gains in home prices,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “Among the positive factors are consumers’ expectations of low inflation and further economic growth as well as recent increases in residential construction including single family housing starts.”

Month-over-month

Before seasonal adjustment, the NHPI posted a gain of 0.1% month-over-month in October. The 10-City Composite was unchanged and the 20-City Composite showed a 0.1% month-over-month advance in October.

After seasonal adjustment, the NHPI posted a gain of 0.9%, while the 10-City and 20-City Composites both increased 0.8% month-over-month. Ten of 20 cities reported increases in October before seasonal adjustment; after seasonal adjustment, all 20 cities increased for the month.

Looking ahead

The recent action by the Federal Reserve, wherein they raised the Fed funds target rate by 25 basis points, along with spreading expectations of further increases in 2016, are leading some to wonder if mortgage interest rates might rise.

“Typically, increases in short term interest rates lead to smaller increases in long term interest rates,” Blitzer noted. “The latest economic projections published by the Fed following the recent rate increase suggest that the Fed funds rate will be around 2.6% in September 2017 compared to a current rate of about 0.5%. These data suggest that potential home buyers need not fear runaway mortgage interest rates.”

If you're a homeowner hoping that your abode was worth more in October than it was a year earlier, you should like this.

CoreLogic's Home Price Index (HPI) shows prices were up both year-over-year and month-over-month in October.

According to the HPI, home prices nationwide -- including distressed sales -- increased by 6.8% from October 2014 to October 2015 and 1.0% from September to October.

Distressed sales include real estate-owned (REO) and short sales.

“The rise in home prices over the past few years has largely been a healthy trend,” said Anand Nallathambi, president and CEO of CoreLogic. “The shadow inventory has been reduced significantly and home equity levels are now approaching pre-recession levels.”

Looking ahead

The CoreLogic HPI Forecast indicates that home prices will increase by 5.2% on a year-over-year basis from October 2015 to October 2016, and the projected month-over-month gain is negligible (0.1%) from October 2015 to November 2015.

The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“Many markets have experienced a low inventory of homes for sale along with strong buyer demand, which is sustaining upward pressure on home prices,” said CoreLogic Chief Economist Dr. Frank Nothaft, adding that these conditions are likely to persist into the new year. “A year from now, as we finish out October 2016,” he added,” we expect the CoreLogic national Home Price Index appreciation to slow to 5.2%.”

Home prices across the U.S. continued to rise in September, according to the S&P/Case-Shiller Home Price Indices.

Year-over-year

The National Index, covering all nine U.S. census divisions, recorded a slightly higher year-over-year gain with a 4.9% annual increase in September 2015 versus a 4.6% increase in August 2015. The 10-City Composite was up 5.0% in the year ending in September, compared to 4.7% in the previous year. The 20-City Composite’s year-over-year gain was 5.5% versus 5.1% in the year ending in September.

After adjusting for the CPI core rate of inflation, the S&P/Case Shiller National Home Price Index rose 3% from September 2014 to September 2015.

San Francisco, Denver, and Portland reported the highest year-over-year gains among the 20 cities, with double-digit price increases of 11.2%, 10.9%, and 10.1%, respectively. Seventeen cities reported greater price increases in the year ending September 2015 versus the year ending August 2015. Phoenix had the longest streak of year-over-year increases, reporting a gain of 5.3% in September 2015 -- the tenth consecutive increase in annual price gains.

“Home prices and housing continue to show strength with home prices rising at more than double the rate of inflation,” said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “The general economy appeared to slow slightly earlier in the fall, but is now showing renewed strength.”

Month-over-month

Before seasonal adjustment, the National Index posted a gain of 0.2% month-over-month in September. Both the 10-City Composite and 20-City Composite reported gains of 0.2% month-over-month. After seasonal adjustment, the National Index posted a gain of 0.8%, while the 10-City and 20-City Composites both increased 0.6% month-over-month. Fifteen of 20 cities reported increases in September before seasonal adjustment; after seasonal adjustment, 19 cities increased for the month.

Blizter says that while interest rate increases from the Federal Reserve may be in the cards, he doesn't expect a major impact on the housing market.

“While this will make news,” he said, “it is not likely to push mortgage rates far above the recent level of 4% on 30 year conventional loans. In the last year, mortgage rates have moved in a narrow range as home prices have risen; it will take much more from the Fed to slow home price gains.”

Rising home prices and interest rates produced a slight decline in housing affordability in the third quarter according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), which was released today.

The National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI) shows 62.2% of new and existing homes sold between the beginning of July and end of September were affordable to families earning the U.S. median income of $65,800. That's down 1% from the second quarter.

The national median home price increased slightly from $230,000 in the second quarter to $231,000 in the third quarter. Meanwhile, average mortgage rates edged higher -- from 3.99% to 4.18% in the same period.

"The decline in the index was slight and affordability remains good," said NAHB Chief Economist David Crowe. "With mortgage rates near historic lows and home prices advancing at a modest pace, this is an excellent time to buy."

Most affordable markets

Syracuse, N.Y., was rated the nation's most affordable major housing market, switching places with Youngstown-Warren-Boardman, Ohio-Pa., which fell to the second slot on the list. In Syracuse, 91.7% of all new and existing homes sold in this year's third quarter were affordable to families, earning the area's median income of $68,500.

Rounding out the top five affordable major housing markets in respective order were Harrisburg-Carlisle, Pa.; Indianapolis-Carmel, Ind.; and Scranton-Wilkes-Barre, Pa.

Meanwhile, Glens Falls, N.Y. claimed the title of most affordable small housing market. There, 92.6% of homes sold during the quarter were affordable to families, earning the area's median income of $65,400.

Smaller markets joining Glens Falls at the top of the list included Sandusky, Ohio; Kokomo, Ind.; Springfield, Ohio; and Rockford, Ill.

Least affordable markets

For the 12th consecutive quarter, San Francisco-San Mateo-Redwood City, Calif. was the nation's least affordable major housing market. There, just 10.5% of homes sold in the third quarter were affordable to families, earning the area's median income of $103,400.

Other major metros at the bottom of the affordability chart were located in California. In descending order, they included Los Angeles-Long Beach-Glendale.; Santa Ana-Anaheim-Irvine.; San Jose-Sunnyvale-Santa Clara.; and Santa Rosa-Petaluma.

All five of the least affordable small housing markets were also in California. At the very bottom of the affordability chart was Santa Cruz-Watsonville, Calif., where 16.5% of all new and existing homes sold were affordable to families, earning the area's median income of $87,000. Other small markets at the lowest end of the affordability scale included Salinas; Napa; San Luis Obispo-Paso Robles; and Santa Barbara-Santa Maria-Goleta, respectively.

"Attractive home prices and interest rates, along with firming job growth, are helping housing markets across the country to gradually improve," said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo. "While this bodes well for housing in the coming year, builders continue to face challenges, including a lack of available lots and skilled labor."

The increase in home prices is continuing into the autumn months.

The CoreLogic Home Price Index (HPI) shows home prices -- including distressed sales -- were up 6.4% in September from the same time a year ago and posted a month-over-month increase of 0.6%.

“After nearly 10 years of very high home price volatility, home price increases have been remarkably stable for the last 15 months, ranging between a 4.8% and 6.5% year-over-year increase,” said Sam Khater, deputy chief economist for CoreLogic. “Home price volatility is now back to the long-term trend prior to the boom and bust which is a good barometer of the market’s stability and health.”

Looking ahead

The CoreLogic HPI Forecast indicates that home prices will increase by 4.7% percent on a year-over-year basis from September 2015 to September 2016, but could potentially dip slightly month over month from September 2015 to October 2015.

The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“The continued growth in home prices is welcome news for many homeowners but more markets are becoming overvalued. In the near term, this trend is likely to continue and pose evaluated risks to the housing economy,” said Anand Nallathambi, president and CEO of CoreLogic.

"More has to be done to expand inventories if we are going to address the emerging affordability crisis, especially in hot markets like California and Colorado.”

It wasn't so long ago that the value of the average condominium was crashing hard. During the housing market meltdown, these units lost value at an alarming rate.

Fast forward to today, and you'll find condos are gaining value at a faster rate than single-family homes in many areas of the country. A report by real estate marketing site Zillow shows condo values are up 5.1% compared to 3.7% for single family homes.

It's not hard to figure out why. Single-family homes have already gained back a lot of their value since the depths of the Great Recession. In a way, condos are simply catching up.

Demographics

But demographics also play a role. Since condos are often an entry-level home purchase, the recent pick-up in first-time home buyers means more demand for condos.

Condos also tend to be numerous in urban areas, and cities are where young Millennials want to be. Zillow data shows that condo values outpaced house values the most in the New York City metro area, in Dallas and Houston, and in Boston and Denver.

Denver is one of the hottest housing markets in the nation. Condo values are up a head-spinning 20% there, rising 4% faster than single-family homes. It's earning condos new respect among real estate professionals.

Better investment now

“The housing bust hit condo values hard, and over the past few years, buying a condo wasn’t always considered a good investment compared to a single family home,” said Zillow Chief Economist Dr. Svenja Gudell. “But that’s changing, and condos increasingly represent a strong-performing, often affordable choice, particularly for first-time buyers interested both in homeownership and in keeping a lower-maintenance, city lifestyle.”

That's not to say there aren't some extra costs associated with owning a condo. Home Owner Association (HOA) fees can be high for some developments, but even with those fees the bottom line can often compare favorably with rents.

A report by Zillow's sister site Trulia notes that rents for a one-bedroom apartment can run between $2,000 and $4,000 a month in San Francisco and New York.

In Philadelphia, a market where many people who rent are saving up to buy, demand for condos has driven up prices by 2.3%. At the same time, the value of single-family homes dipped slightly.

Home prices across the U.S. continued their rise over the last 12 months during August.

The S&P/Case-Shiller U.S. National Home Price Index -- which covers all nine U.S. census divisions -- was up 4.7% on a year-over-year basis in August, versus a 4.6% increase in July.

The 10-City Composite increased 4.7% in the year to August compared with 4.5% in the prior month, while the 20-City Composite’s year-over-year gain was 5.1% vs. 4.9% in the year to July.

San Francisco, Denver, and Portland reported the highest year-over-year gains among the 20 cities with price increases of 10.7%, 10.7%, and 9.4%, respectively. Fifteen cities reported greater price increases in the year ending August 2015 compared with the year ending July 2015. San Francisco and Denver are the only cities with double digit increases.

Phoenix, which reported an increase of 4.9% in August, had the longest streak of year-over-year increases, posting the ninth consecutive increase in annual price gains. Portland posted a 9.4% annual increase, compared with 8.5% the month before for the biggest jump in year-over-year gains during August.

“Home prices continue to climb at a 4% to 5% annual rate across the country,” said David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices. “Most other recent housing indicators also show strength. Housing starts topped an annual rate of 1.2 million units in the latest report with continuing strength in both single family homes and apartments. The National Association of Home Builders sentiment survey, reflecting current strength, reached the highest level since 2005, before the housing collapse. Sales of existing homes are running about 5.5 million units annually with inventories of about five months of sales. However, September new home sales took an unexpected and sharp drop as low inventories were cited as a possible cause.”

Month-over-month

The National Index posted a gain of 0.3% month-over-month in August, with the 10-City Composite and 20-City Composite reporting gains of 0.3% and 0.4% month-over-month, respectively. Eighteen of 20 cities reported increases in August.

“A notable part of today’s economy is the continuing low inflation rate; in the year to September, consumer prices were unchanged,” Blitzer added. “Even excluding food and energy, the core inflation was 1.9%. One result is that a 5% price increase in the value of a house means more today than it did in 2005-2006, the peak of the housing boom when the inflation rate was higher. The rebound from the recent lows was faster than the 1997-2005 housing boom, and also much less driven by inflation.”

When real estate economists talk about housing affordability, they tend to focus on home prices and interest rates.

While those are important, they aren't the only factors that determine whether a home is affordable. Another big consideration is the purchaser's income.

Researchers at real estate site Zillow conducted an interesting research project. They selected several occupational categories for which there is data on average salaries and compared that with home prices in various housing markets. The results were surprising.

Tale of two teachers

They found that teachers would have an easier time finding an affordable home in parts of California – known for pricey real estate – than in Salt Lake City. The reason? Teachers in California make a lot more money than teachers in Utah.

In Bakersfield, Calif., the median home value is $166,300, while the average teacher's salary is $61,000 a year. Since consumers in Bakersfield usually spend 22% of their income on a house payment, a Bakersfield teacher could afford a $310,000 home. In fact, currently 86% of the homes on the market would be in their price range.

It's a much different story in Salt Lake City, where the average teacher earns $38,000 a year and people historically spend the same share – 22% – of their incomes on a mortgage payment. There, teachers could buy a $195,000 home – meaning only about a quarter of the homes on the Salt Lake City market would fall within their budget.

The Midwest isn't always a bargain

That's why homes in the middle of the country aren't the bargains they appear to be. Home prices in the Midwest are less than comparable houses on either coast, but salaries are generally lower too.

"There's a lot more to home buying affordability than just the cost of the home. Incomes vary a lot across the country – even within the same occupation," said Zillow Chief Economist Dr. Svenja Gudell. "There's also the question of how much of your paycheck you're willing to put toward a house payment, and finally, whether you can find a home in your price range.”

Gudell says many potential buyers are doing all the right things before buying a home – saving a healthy down payment, organizing finances, and qualifying for a loan – only to find there are few homes available within their budget and close to their job.

According to Zillow's research, if you are a lawyer or judge you could afford almost every home on the market in Buffalo or Syracuse, N.Y. But don't move to Stockton, Calif., because 34% of homes would be out of your price range.

Your home is likely worth more than it was a year ago according to recent statistics. At the same time, it is probably worth more than it was just a month ago in August.

According to the CoreLogic Home Price Index (HPI), home prices nationwide -- including distressed sales (which include short sales and real estate-owned (REO) transactions) -- rose 6.9% in August from the same time a year ago, and were up 1.2% from July.

“Home price appreciation in cities like New York, Los Angeles, Dallas, Atlanta and San Francisco remain very strong reflecting higher demand and constrained supplies,” said Anand Nallathambi, president and CEO of CoreLogic.

“Continued gains in employment, wage growth and historically low mortgage rates are bolstering home sales and home price gains. In addition, an increasing number of major metropolitan areas are experiencing ever-more severe shortfalls in affordable housing due to supply constraints and higher rental costs. These factors will likely support continued home price appreciation in 2016 and possibly beyond.”

Looking ahead

The CoreLogic HPI Forecast indicates home prices will increase by 4.3% on a year-over-year basis from August 2015 to August 2016 and remain unchanged month-over-month from August 2015 to September 2015.

The forecast is a projection of home prices using the HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“Economic forecasts generally project higher mortgage rates and more single-family housing starts for 2016.” said Frank Nothaft, chief economist for CoreLogic. “These forces should dampen demand and augment supply, leading to a moderation in home price growth.”

Home prices across the country were higher in July on both a year-over-year and month-over-month basis, according to the S&P/Case-Shiller Home Price Indices.

The leading measure of U.S. home prices, covering all nine U.S. census divisions, posted a year-over-year gain of 4.7% in July, versus a 4.5% increase in June. The 10-City Composite was virtually unchanged, rising 4.5% year-over-year, while the 20-City Composite was up 5.0%.

“Prices of existing homes and housing overall are seeing strong growth and contributing to recent solid growth for the economy,” said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “The S&P/Case Shiller National Home Price Index has risen at a 4% or higher annual rate since September 2012, well ahead of inflation.”

West leads the advance

San Francisco, Denver, and Dallas reported the highest year-over-year gains among the 20 cities with price increases of 10.4%, 10.3%, and 8.7%, respectively. Fourteen cities reported greater price increases in the year ending July 2015 over the year ending June 2015. San Francisco and Denver are the only cities with a double digit increase, while Phoenix had the longest streak of year-over-year increases, reporting an increase of 4.6% in July -- the eighth consecutive year-over-year increase. Boston posted a 4.3% annual increase, versus 3.2% in June for the biggest jump in year-over-year gains in July.

Month-over-month

Before seasonal adjustment, the National Index posted a gain of 0.7% month-over-month in July, with the 10-City Composite and 20-City Composite both rising 0.6%. After seasonal adjustment, the National index posted a gain of 0.4%, while the 10-City and 20-City Composites were both down 0.2%. All 20 cities reported increases in July before seasonal adjustment; after seasonal adjustment, ten were down, nine were up, and one was unchanged.

The three cities with the largest cumulative price increases since January 2000 are all in California: Los Angeles (138%), San Francisco (116%), and San Diego (115%). The two smallest gains since January 2000 are Detroit (3%) and Cleveland (10%). The Sunbelt cities -- Miami, Tampa, Phoenix, and Las Vegas, which were the poster children of the housing boom, have yet to make new all-time highs.

Despite real estate industry statistics that consistently show a rise in the average home price, there is evidence that these increases skip over several significant housing markets.

In fact, real estate market site Zillow has compiled statistics showing that more than one-quarter of U.S. homes lost value over the last year, at a time when the real estate market as a whole was thought to be still improving.

The disconnect is largely due to the nature of real estate, and the importance of “location, location, location.” In some markets, prices have already eclipsed those at the height of the housing bubble. Others are still struggling to put the housing crisis in the rear view mirror.

From a national standpoint, Zillow says homes gained 3.3% from a year ago. Not a big gain but more than the inflation rate.

Leveling off

But the numbers show the national growth rate in home prices has leveled off over the past five months, suggesting the housing recovery is coming to an end and the market is returning to normal.

A disturbing twist, however, is the 27.9% of homes that lost value over the past year. Something like that happened in the recent past – just before the market crash, in fact, when 21.2% of homes were worth less.

The eroding values peaked in December 2008, when 81.6% of homes had lost value. Today, the most significant falling values are clustered in East Coast markets.

According to Zillow, 48% of homes in Baltimore, 43% of homes in Philadelphia, 41% of homes in Washington, DC, and 38.6% of homes in New York and Northern New Jersey have lost value over the last year.

Markets in the Midwest also had their share of losses. Home values were down 32% in Cincinnati, 31% in Cleveland, and 27% in St. Louis.

Hot markets still holding value

At the other end of the scale, some real estate markets remain red hot, with homes shedding little of their value. Markets like Denver, Dallas, San Jose, and San Francisco all saw double-digit home value growth over the past year. Less than five percent of homes in Denver and Dallas were worth less in August 2015 than they were a year ago.

"We're not going in reverse, but we are hitting the brakes a bit in some markets," said Zillow Chief Economist Dr. Svenja Gudell. "It's easy to say the recession is over when a third of the biggest markets are more expensive now than ever before, but we're still seeing a number of homes losing value. The reality is there are still areas lagging behind in the recovery."

If you're renting, does that mean you should be dissuaded from buying? Again, it depends upon the market. However, renting in most areas is still no bargain.

The Zillow Rent Index rose 3.8% on an annual basis to$1,381, suggesting that rents are rising faster than home values.

Housing prices continued their increase in mid-summer.

According to the Federal Housing Finance Agency (FHFA), the House Price Index (HPI) for July was up 0.6% on a seasonally adjusted basis from the previous month.

From July 2014 to July 2015, house prices were up 5.8%. The HPI is now 1.1% below its March 2007 peak and roughly the same as the November 2006 index level.

For the nine census divisions, seasonally adjusted month-over-month price changes ranged from -1.2% in the New England division to +1.6% in the Mountain division.

The year-over-year changes were all positive, ranging from +2.1% in the New England division to +9.4% in the Mountain division.

The HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.

The complete HPI report is available on the FHFA website.

To sell your home without it lingering on the market, any Realtor will tell you having it priced right is one of the most important things you can do.

But the latest data from Quicken Loans suggest homeowners who want to sell still have a hard time putting a realistic value on their properties.

Each month Quicken Loans releases its Home Value Index (HVI), a measure of home value changes based on actual appraisals. It also records homeowners' estimates of what their homes are worth, which it calls the Home Price Perception Index (HPPI). Those two numbers remained out of alignment in August.

In August, the data show the gap between homeowners' estimates and what appraisers say a home is worth was 2.65%. And the reality gap appears to be growing each month.

Increasingly wider gap

Homeowners' estimates of their homes' value exceeded appraiser opinions by a wider margin in August than in July, making August the seventh consecutive month of an increasingly wider gap between opinions.

According to the HVI, national housing values were nearly flat in August from the month before, with a slight drop of 0.05%. This is less than the 0.27% decrease in July. Home values continued to rise on a year-over-year basis, showing a 3.24% increase in value nationally compared to August 2014.

"While the month-to-month number is interesting to examine, it is not the single most important factor of the HPPI report,” said Quicken Loans chief economist Bob Walters. “Instead, the focus should be on the trend, the direction it's heading and how fast."

Walters says the disconnect between estimate and reality may lie in the fact that homeowners may be assuming that home values have been in a steady, linear path upward. In reality, home values appear to have peaked and have remained mostly flat this year.

Zillow sees similar trend

In late August real estate market site Zillowreported the first negative monthly change in home values since the market began its recovery nearly four years ago. It reported homes lost 0.1% of their value in July, falling to a Zillow Home Value Index of $179,900. Zillow also found values up on an annual basis but said the recent trend is unmistakably flat or downward.

Of the 517 metros covered by Zillow, 204 saw a slowdown, including major metros like Washington, D.C., and Cincinnati, where home values declined month-over-month in July. Nothing to be alarmed about, Zillow says, just a return to normal.

"This slight dip in home values is a sign of the times. Many people didn't think it was happening, but it is: we're going negative," said Zillow chief economist Svenja Gudell.

Gudell says the trend might even be good news for buyers, who will find homes more affordable. That is, if sellers have a realistic view of what their home is worth.

Another strong year-over-year jump in home prices.

According to property information, analytics, and data-enabled services provider CoreLogic, its Home Price Index (HPI) shows prices across the country -- including distressed sales -- increased by 6.9% in July from the same month a year ago.

On a month-over-month basis, prices -- including distressed sales -- were up 1.7% from June.

Distressed sales include short sales and real estate-owned (REO) transactions.

“Home sales continued their brisk rebound in July and home prices reflected that, up 6.9 percent from a year ago,” said Frank Nothaft, chief economist for CoreLogic. “Over the same period, the National Association of Realtors reported existing sales up 10% and the Census Bureau reported new home sales up 26% in July.”

Substantial growth

Including distressed sales, only Colorado has more than 10% year-over-year growth. Additionally, only 10 states have experienced increased growth in the last year that matched or surpassed the nation as a whole; those states are: Colorado, Florida, Hawaii, Nevada, New York, Oregon, South Carolina, South Dakota, Texas, and Washington.

Fifteen states reached new price peaks since January 1976 when the index began; these include Alaska, Arkansas, Colorado, Hawaii, Iowa, Kentucky, Montana, Nebraska, New York, North Carolina, North Dakota, Oklahoma, South Dakota, Tennessee, and Texas. Only two states experienced home price depreciation -- Massachusetts (-2.1%) and Mississippi (-0.8%).

Excluding distressed sales, prices jumped 6.7% in July from July 2014 and posted a month-over-month increase of 1.5%. Excluding distressed sales, only West Virginia (-0.3%) and Vermont (-0.1%) showed year-over-year home price depreciation in July.

“Low mortgage rates and stronger consumer confidence are supporting a resurgence in home sales of late,” said Anand Nallathambi, president and CEO of CoreLogic. “Adding to overall housing demand is the benefit of a better labor market which has provided millennials the financial independence to form new households and escape ever-rising rental costs.”

Report highlights

• Including distressed sales, the five states with the highest home price appreciation were: Colorado (+10.4%), Washington (+9.9%), Nevada (+9.1%), Hawaii (+8.9%), and Oregon (+8.8%).
• Excluding distressed sales, the five states with the highest home price appreciation were: Colorado (+10.1%), Washington (+9.5%), Nevada (+9.1%), Oregon (+9.1%), and New York (+9%).
• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to July 2015) was -6.6%. Excluding distressed transactions, the peak-to-current change for the same period was -3.5%.
• Including distressed transactions, the five states with the largest peak-to-current declines were: Nevada (-30.6%), Florida (-28.1%), Arizona (-25.1%), Rhode Island (-24.2%), and Maryland (-20.2%).
• Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, 95 showed year-over-year increases. The five CBSAs that showed year-over-year declines were: Baltimore-Columbia-Towson, Md. (-0.3%); Boston, Mass. (-3.8%); New Haven-Milford, Conn, (-1.9%); New Orleans-Metairie, La. (-4.9%); and Worcester, Mass.-Conn. (-7.2%).

Looking ahead

The CoreLogic HPI Forecast indicates home prices -- including distressed sales -- will increase 0.5% month-over-month from July to August, and 4.7% -- on a year-over-year basis from July 2015 to July 2016.

Excluding distressed sales, home prices are projected post a 0.4% month-over-month gain from July to August and 4.6% year-over-year from July 2015 to July 2016.

The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

For economists worrying that home prices were rising too far, too fast – here's some good news. Real estate market site Zillowreports that the average home went down in value last month for the first time since the market began its recovery in 2011.

U.S. homes lost 0.1% of their value in July, falling to a Zillow Home Value Index of $179,900. But on a year-over-year basis, homes still went up in value by 3.0%, down from 3.4% in June.

The numbers suggest the run-up in prices is more of a pause than a reversal, though the next few months will tell that story.

Zillow covers 517 metros in its housing index and 204 metros saw a slowdown in July. Strong markets like Washington, DC and Cincinnati gave some ground last month. Market analysts at Zillow say the slowing appreciation is simply a sign that the market is returning to normal.

Back to normal

Markets like Denver, San Francisco, San Jose, and Dallas slowed from double-digit growth to the single digits.

"This slight dip in home values is a sign of the times. Many people didn't think it was happening, but it is: we're going negative," said Zillow Chief Economist Svenja Gudell. "We've been expecting to see a monthly decline as markets return to normal.”

Gudell says recent homebuyers shouldn't panic. This is not a bursting of a bubble and 10% declines are on no one's radar.

“The market is leveling off, and it's good news, particularly for buyers, because it will ease some of the competitive pressure," she said.

Rising inventories

The leveling off of prices comes at a time when banks are putting a lot more foreclosed homes back on the market, replenishing declining inventories. In many markets, it was the lack of homes for sale that put upward pressure on home prices.

As we reported just last week, there were 124,910 foreclosure filings in the U.S. in July, a sharp 7% rise from June and a 14% surge from July 2014. But that was because many old foreclosures were finally seized by lenders and placed back on the market, in many cases at below market prices.

As distressed properties sell in the coming months, their lower prices can be expected to pull down the average sales price, or at least keep it from rising very much. But that doesn't necessarily mean the real estate market is slipping.

Boost for first-time buyers

And it might very well be good news for the millions of first-time buyers who have put off homeownership but now are sticking their toes into the market. In addition to more distressed property for sale, Zillow says homeowners who have been waiting to sell until prices hit their peak may now be ready to move.

Meanwhile, the incentives to buy remain strong. Interest rates remain near their historic lows and Zillow reports rents continue to grow at a rapid pace, up 4.2% from last July.

Home prices continued their rise across the country over the last 12 months during June, according to the S&P/Case-Shiller Home Price Indices.

The latest data shows that on a year-over-year basis, June was a better month for price hikes than May. The National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.5% annual increase in June versus a 4.4% increase in May.

The 10-City Composite had marginally lower year-over-year gains, with an increase of 4.6% year-over-year. The 20-City Composite year-over-year pace was virtually flat, rising 5.0% year-over-year.

Way out west

Denver, San Francisco, and Dallas reported the highest year-over-year gains among the 20 cities with price increases of 10.2%, 9.5%, and 8.2%, respectively. Eleven cities reported greater price increases in the year ending June 2015 over the year ending May 2015.

Denver is the only city with a double digit increase, and Phoenix and Detroit had the longest streaks of year-over-year increases. Phoenix reported a 4.1% in June 2015, the seventh consecutive year-over-year increase. Detroit recorded 5.7% in June 2015, the sixth consecutive year-over-year increase.

“Nationally, home prices continue to rise at a 4-5% annual rate, two to three times the rate of inflation,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “While prices in San Francisco and Denver are rising far faster than those in Washington D.C., New York or Cleveland, the city-to-city price patterns are little-changed in the last year. Washington saw the smallest year-over-year gains in five of the last six months; San Francisco and Denver ranked either first or second of all cities in the last five months. The price gains have been consistent as the unemployment rate declined with steady inflation and an unchanged Fed policy."

Month-over-month

Before seasonal adjustment, the National index and 20-City Composite both reported gains of 1.0% month-over-month in June. The 10-City Composite posted a month-over-month gain of 0.9%. After seasonal adjustment, the National index posted a gain of 0.1% while the 10-City and 20-City Composites were both down 0.1% month-over-month.

All 20 cities reported increases in June before seasonal adjustment; after seasonal adjustment, nine were down, nine were up, and two were unchanged.

FHFA prices

Separately the Federal Housing Finance Agency (FHFA) House Price Index (HPI) shows prices were up 1.2% in the second quarter -- the 16th consecutive quarterly price increase in the purchase-only, seasonally adjusted index. FHFA's seasonally adjusted monthly index for June was up 0.2% from May. House prices rose 5.4% from a year earlier.

"Home price growth in the second quarter once again far exceeded the pace of overall inflation, even as mortgage rates drifted upwards," said FHFA Principal Economist Andrew Leventis. "Although too early to tell whether it's a sign of a slowdown, the monthly appreciation rate in June was more modest than we have seen in a while."

Report highlights

• Home prices rose in every state between the second quarter of 2014 and the second quarter of 2015. The top five areas in annual appreciation: 1) Colorado – 10.6%, 2) Nevada – 10.5%, 3) Florida – 9.7%, 4) Hawaii – 9.5% and 5) Washington – 8.8%.
• Among the 100 most-populated metropolitan areas in the U.S., four-quarter price increases were greatest in San Francisco-Redwood City-South San Francisco, Calif., where prices increased by 18.3%. Prices were weakest in the Allentown-Bethlehem-Easton, Pa.-N.J., where they fell -1.1%.
• Of the nine census divisions, the South Atlantic division experienced the strongest increase in the second quarter, posting a 1.7% quarterly increase and a 6.1% increase since last year. House price appreciation was weakest in the Middle Atlantic division, where prices were flat in the second quarter.

The HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.

The complete report is avaliable on the FHFA website.

Home prices continued to rise in June on both a year-over-year and month-over-month basis.

CoreLogic reports its Home Price Index (HPI), which track home prices nationwide shows sales -- including distressed sales -- rose by 6.5% in June from the same month a year earlier. That marks 40 consecutive months of year-over-year increases in home prices nationally.

Distressed sales include short sales and real estate-owned (REO) transactions.

On a month-over-month basis, home prices -- including distressed sales -- rose 1.7% from May's level.

New peaks reached

Including distressed sales, 35 states and the District of Columbia were at or within 10% of their peak prices in June. Fifteen states -- Alaska, Arkansas, Colorado, Hawaii, Iowa, Kentucky, Nebraska, New York, North Carolina, North Dakota, Oklahoma, South Dakota, Tennessee, Texas and Wyoming -- and D.C. reached new price peaks.

Excluding distressed sales, home prices posted a year-over-year gain of 6.4% , and increased by 1.4% month-over-month. Excluding distressed sales, only Massachusetts (-1.5%) and Louisiana (-0.1%) showed year-over-year depreciation in June.

“The tightness of the for-sale inventory varies across cities. Throughout the U.S., the months’ supply was 4.8 months in the CoreLogic home-listing data for June, but varied greatly across cities. In San Jose and Denver, there was only 1.6 months’ supply of homes on the market, whereas Philadelphia had a 7 months’ supply and Providence had a 6.6 months’ supply,” said Frank Nothaft, chief economist for CoreLogic. “The stronger appreciation was registered in cities with limited inventory and strong homebuyer activity, such as San Jose and Denver.”

Report highlights

• Including distressed sales, the 5 states with the highest home price appreciation were: Colorado (+9.8%), Washington (+8.9%), New York (+8.3%), South Carolina (+8%) and Nevada (+8%).
• Excluding distressed sales, the 5 states with the highest home price appreciation were: Colorado (+9.3%), New York (+8.5%), Washington (+8.3%), Oregon (+8.2%) and Nevada (+7.9%).
• Including distressed sales, only 4 states experienced home price depreciation: Massachusetts (-5%), Connecticut (-0.6%), Louisiana (-0.4%) and Mississippi (-0.3%).
• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to June 2015) was -7.4%. Excluding distressed transactions, the peak-to-current change for the same period was -4%.
• The 5 states with the largest peak-to-current declines, including distressed transactions, were: Nevada (-32.2%), Florida (-28.7%), Rhode Island (-26.5%), Arizona (-25.8%) and Maryland (-21.2%).
• Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, 93 showed year-over-year increases. The seven CBSAs that showed year-over-year declines were: Baltimore-Columbia-Towson, Md. (-8%); Boston, Mass. (-4.4%); Camden, N.J. (-0.5%); Hartford-West Hartford-East Hartford, Conn, (-0.1%); New Haven-Milford, Conn. (-1.8%); New Orleans-Metairie, La. (-6.1%) and Worcester, Mass.-Conn. (-7%).

“The current cycle of home price appreciation is closing in on its fourth year with no apparent end in sight,” said Anand Nallathambi, president and CEO of CoreLogic. “Pent-up buying demand and affordability, together with higher consumer confidence buoyed by a more robust labor market, are a potent mix fueling a 6.5% jump in home prices through June with more increases likely to come.”

Looking ahead

The CoreLogic HPI forecast indicates home prices -- including distressed sales -- will increase by 0.6% month-over-month from June 2015 to July 2015 and by 4.5% on a year-over-year basis from June 2015 to June 2016.

Excluding distressed sales, home prices are projected to increase by 0.5% month-over-month from June 2015 to July 2015 and by 4.2% year-over-year from June 2015 to June 2016.

Home prices continued their rise across the country over the last 12 months on both a year-over-year and month-over-month basis in May, according to the S&P/Case-Shiller Home Price Indices.

Both the 10-City Composite and National indices showed slightly higher year-over-year gains while the 20-City Composite had marginally lower year-over-year gains when compared with the previous month.

The 10-City Composite posted a year-over-year gain of 4.7%, while the 20-City Composite was up 4.9%. The S&P/Case-Shiller U.S. National Home Price Index, covering all 9 U.S. census divisions, recorded a 4.4% annual increase in May; the advance in April was 4.3%.

“As home prices continue rising, they are sending more upbeat signals than other housing market indicators,” said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Nationally, single family home price increases have settled into a steady 4%-5% annual pace following the double-digit bubbly pattern of 2013.

At the same time though, Blitzer expects the rate of home price increases is more likely to slow than to accelerate over the next two years or so. “Prices are increasing about twice as fast as inflation or wages, “he notes, adding “moreover, other housing measures are less robust. Housing starts are only at about 1.2 million units annually, and only about half of total starts are single family homes. Sales of new homes are low compared to sales of existing homes.”

The West leads the way

Denver, San Francisco and Dallas reported the highest year-over-year gains among the 20 cities with price increases of 10.0%, 9.7% and 8.4%, respectively. Ten cities reported greater price increases in the year ended May 2015 over the year ended April 2015.

New York and Phoenix reported 6 consecutive months of increases in their year-over-year returns since November 2014. Year-over-year returns in New York increased from 1.3% last November to 3.0% in May. Phoenix climbed from 2.0% to 3.8% in the same period.

Month-over-month

Before seasonal adjustment, the National index, 10-City Composite and 20-City Composite all posted a gain of 1.1% month-over-month in May. After seasonal adjustment, the National index was unchanged; the 10-City and 20-City Composites were both down 0.2% month-over-month. All 20 cities reported increases in May before seasonal adjustment; after seasonal adjustment, 10 were down, 8 were up, and 2 were unchanged.

Blitzer says first time homebuyers are the weak spot in the market, providing the demand and liquidity that supports trading up by current home owners. But he adds, “Without a boost in first timers, there is less housing market activity, fewer existing homes being put on the market, and more worry about inventory.”

Research at the Atlanta Federal Reserve Bank argues that one should not blame millennials for the absence of first time buyers. The age distribution of first time buyers has not changed much since 2000; if anything, the median age has dropped slightly.

“Other research at the New York Fed points to the size of mortgage down payments as a key factor,” said Blitzer. “The difference between a 5% and 20% down payment -- particularly for people who currently rent -- has a huge impact on buyers’ willingness to buy a home. Mortgage rates are far less important to first time buyers than down payments.”  

Home sales are rising, which is good news for the housing market. But the downside to that good news is a shrinking inventory.

As homes disappear from the market, there aren't additional ones to take their place. That tips the balance of power toward sellers and could frustrate the new wave of first-time buyers just starting to look.

By its accounting, online real estate marketplace Redfin says home sales jumped 11.4% year-over-year in June, leaving buyers looking at the lowest inventory of available homes on record.

Selling quickly

June was also the fastest month for home sales on record, with median days on market falling to 26, breaking the record of 27 days set in June 2013.

Even with robust buyer demand and low inventory, Redfin reports prices have not responded accordingly. Prices were up, but only by a modest 5.1% year-over-year.

Even 5.1% might be high, since Denver, Miami, Los Angeles and San Francisco are commanding premiums that pushed up the national average. All four cities posted double-digit year-over-year price increases in June.

Prices elsewhere may have been held in check by conservative appraisals, which have become the norm under tighter loan underwriting guidelines.

Local Market Insights in June

In fact, some of the hotter markets are showing signs of cooling off over the last couple of months. In San Francisco, one of the most expensive housing markets in the nation, the median sale price fell 2.8% month-over-month, to $1.07 million. But year-over-year, prices were up 16.3%.

Redfin reports new listings in San Francisco declined 10.6% from June 2014. San Francisco hasn’t seen year-over-year growth in new listings since February 2014.

Home values continued to soar in Denver, rising 14.8% year-over-year to a median of $325,000. July was the eighth consecutive month of year-over-year price growth above 10%.

Denver was still the fastest-moving market, with half of all new listings selling in 6 days or less, followed by Seattle at 9, Portland at 10, and Boston and Omaha at 11.

According to Redfin, the pricey San Jose market suffered the biggest year-over-year drop in sales on record going back to 1998, falling by 50.7% since last year. In another bad sign for the market, inventory grew by 13.5% and average days on the market surged from 13 to 33 days.

Richmond, Va., led the nation in year-over-year sales growth, with a massive increase of 35.4% over last June. Boston had the highest increase from May to June at 49.3%.

Be it ever so humble or not, the price of a home was up once again on both a year-over-year and month -over-month basis.

CoreLogic reports its Home Price Index (HPI) which shows that home prices nationwide, including distressed sales, rose 6.3% in May from the same month in 2014. This represents 39 months of consecutive year-over-year increases in home prices nationally.

On a month-over-month basis, home prices nationwide -- including distressed sales -- increased by 1.7% from April.

Distressed sales include short sales and real estate-owned (REO) transactions.

“Mortgage rates on 30-year fixed-rate loans remained below 4% through May, helping to fuel home-purchase activity,” said Frank Nothaft, chief economist for CoreLogic. “Our homes-for-sale listing data shows that markets with high demand and limited supply, such as San Francisco, are recording double-digit appreciation rates over the past year."

Moving toward their peaks

Including distressed sales, 33 states and the District of Columbia were at or within 10% of their peak prices in May. Ten states and DC reached price peaks not seen since January 1976. They include Alaska, Colorado, Iowa, Nebraska, New York, North Carolina, Oklahoma, Tennessee, Texas and Vermont.

Excluding distressed sales, home prices were up 6.3% in May 2015 compared with May 2014, and 1.4% month-over-month. Only Massachusetts and Louisiana (both -0.2%) showed year-over-year depreciation May.

“The rate of home price appreciation ticked up in May with gains being fairly widely distributed across the country. Importantly, higher home prices over the past couple of years have spurred increases in new single-family construction,” said Anand Nallathambi, president and CEO of CoreLogic. “Sales of newly built homes during the first five months of 2015 were up 23 percent from a year ago, and as rising values build equity for homeowners, we expect to see more existing homes offered for sale in the coming year.”

Report highlights

• Including distressed sales, the 5 states with the highest home price appreciation were: South Carolina (+10.3%), Colorado (+9.8%), Washington (+8.8%), Florida (+8.7%) and Nevada (+8.3%).
• Excluding distressed sales, the 5 states with the highest home price appreciation were: South Carolina (+9.6%), Colorado (+9.2%), Florida (+8.9%), Washington (+8.5%) and Oregon (+7.9%).
• Including distressed sales, only 5 states experienced home price depreciation including: Massachusetts (-4.8%), Connecticut (-1.8%), Maryland (-1.5%), Mississippi (-1.4%) and Louisiana (-0.8%).
• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to May 2015) was -8.4%. Excluding distressed transactions, the peak-to-current change for the same period was -4.7%.
• The 5 states with the largest peak-to-current declines, including distressed transactions, were: Nevada (-32.9%), Florida (-28.8%), Rhode Island (-27.5%), Arizona (-26%) and Maryland (-23.1%).
• Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, 92 showed year-over-year increases. The 8 CBSAs that showed year-over-year declines were: Baltimore-Columbia-Towson, Md. (-1.8%); Boston, Mass. (-4.8%); Bridgeport-Stamford-Norwalk, Conn. (-0.32%); Cambridge-Newton-Framingham, Mass. (-2.9%); Camden, N.J. (-0.96%); New Orleans-Metairie, La. (-6.4%); Silver Spring-Frederick-Rockville, Md. (-0.31%) and Worcester, Mass.-Conn. (-6.6%).

Looking ahead

The CoreLogic HPI Forecast indicates home prices -- including distressed sales -- will increase by 0.9% month-over-month from May 2015, to June 2015, and by 5.1% on a year-over-year basis from May 2015, to May 2016. Excluding distressed sales, home prices are projected to increase by 0.8% month-over-month from May 2015, to June 2015, and by 4.7% year-over-year from May 2015- to May 2016.

The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

Home prices continued their rise across the country over the last 12 months, according to the S&P/Case-Shiller Home Price Indices.

The National Home Price Index, covering all 9 U.S. census divisions, posted a 4.2% annual gain in April, with the 10-City Composite up 4.6% year-over-year, and the 20-City Composite rising 4.9%.

Both Composites and the National index showed slightly lower year-over-year gains compared to last month. The 10-City Composite gained 4.6% year-over-year, while the 20-City Composite gained 4.9% year-over-year.

The West leads the way

Denver and San Francisco reported the highest year-over-year gains with price increases of 10.3% and 10.0%, respectively, over the last 12 months. Dallas posted an 8.8% year-over-year gain to round out the top three cities.

Nine cities reported faster price increases in the year ended April 2015 over the year ended March 2015. Las Vegas prices rose 6.3% in the year to April versus 5.7% in the year to March.

In 11 cities, however, the rate of annual price gains slowed. Boston home prices were up 1.8% in the 12 months ending in April versus a 4.6% gain in the 12 months ending in March 2015.

“Home prices continue to rise across the country, but the pace is not accelerating,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices.

“Moreover, consumer expectations are consistent with the current pace of price increases," he pointed out. "A recent national survey published by the New York Fed showed the average expected price increase among both owners and renters is 4.1%. Both the current rate of home price increases and the consumers’ expectations are a bit lower than the long term annual price change of 4.9% since 1975.”

Month-over-month

Before seasonal adjustment, the National index increased 1.1% in April and the 10-City and 20-City Composites posted gains of 1.0% and 1.1%, respectively month-over-month. After seasonal adjustment, the National index was unchanged; the 10- and 20-city composites were up 0.3% and 0.4%.

All 20 cities reported increases in April before seasonal adjustment; after seasonal adjustment, 12 were up and 8 were down.

They did it gain.

For the 38^th month in a row, home prices nationwide -- including distressed sales -- have posted a year-over-year gain.

CoreLogic reports its Home Price Index (HPI) increased by 6.8% in April 2015 from the same month in 2014. On a month-over-month basis, home prices nationwide, including distressed sales, rose 2.7% from the previous month.

Distressed sales include short sales and real estate-owned (REO) transactions.

“For the first four months of 2015, home sales were up 9% compared to the same period a year ago,” said Frank Nothaft, chief economist for CoreLogic. “One byproduct of the increased sales activity is rising house prices, and, as a result, month-over-month home prices are up almost 3% for April 2015 and up more than 6% from a year ago.”

Approaching the peak

Including distressed sales, 30 states plus the District of Columbia were at or within 10% of their peak prices in April. Eight states and D.C. reached new price peaks not experienced since January 1976 when the CoreLogic HPI started. These states include Alaska, Colorado, Nebraska, New York, Oklahoma, Tennessee, Texas and Wyoming.

Excluding distressed sales, home prices increased by 6.8% from a year earlier 2.3% month-over-month compared. Excluding distressed sales, only South Dakota (-0.3%) and Louisiana (-0.2%) showed year-over-year depreciation in April.

Report highlights

• Including distressed sales, the 5 states with the highest home price appreciation were: South Carolina (+11.4%), Colorado (+9.7%), Washington (+9.1%), Florida (+9%) and Texas (+8.3%).
• Excluding distressed sales, the 5 states with the highest home price appreciation were: South Carolina (+10%), Florida (+9.5%), Colorado (+9.3%), Washington (+8.7%) and Texas (+8.2%).
• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to April 2015) was -9%. Excluding distressed transactions, the peak-to-current change for the same period was -5.1%.
• Including distressed sales, 4 states experienced year-over-year home price depreciation: Massachusetts (-1.7%), Louisiana (-1.5%), Connecticut (-1.1%) and Maryland (-0.7%).
• The 5 states with the largest peak-to-current declines, including distressed transactions, were: Nevada (-33.9%), Florida (-29.3%), Rhode Island (-28.2%), Arizona (-26.2%) and Connecticut (-24.8%).
• Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, 92 showed year-over-year increases. The eight CBSAs that showed year-over-year declines were: Baltimore-Columbia-Towson, Md.; Camden, N.J.; Hartford-West Hartford-East Hartford, Conn.; New Orleans-Metairie, La.; Worcester, Mass.-Conn.; Albany-Schenectady-Troy, N.Y.; New Haven-Milford, Conn. and Wilmington, Del.-Md.-NJ.

Looking ahead

The CoreLogic HPI Forecast indicates that home prices -- including distressed sales -- are projected to increase by 1.1% month over month from April 2015 to May 2015 and by 5.3% on a year-over-year basis from April 2015 to April 2016.

Excluding distressed sales, home prices are projected to increase by 0.9% month over month from April 2015 to May 2015 and by 4.9% year over year from April 2015 to April 2016.

“Old fashion supply and demand, fueled by historically low mortgage rates and improving consumer finances and confidence, continue to push home prices up,” said Anand Nallathambi, president and CEO of CoreLogic. “We expect continued price appreciation throughout 2015 and into next year. Over the longer term, household formation, up by more than one million over the past year alone, will drive down vacancy rates and create tighter housing markets in many metropolitan areas. This should provide the necessary underpinning for rising prices for the foreseeable future.”

The rise in home prices continued during March on both a year-over-year and month-over-month basis

According to the S&P/Case-Shiller Home Price Indices, both the 10-City and 20-City Composites saw year-over-year increases. The 10-City Composite was up 4.7%, while the 20-City Composite jumped 5.0%. The National Home Price Index -- covering all 9 U.S. census divisions -- recorded a 4.1% annual gain in March versus a 4.2% increase in February.

San Francisco and Denver reported the highest year-over-year increases -- 10.3% and 10.0%, respectively, over the last 12 months. San Francisco’s annual gain is its first double-digit year-over-year increase since July 2014. Dallas reported a 9.3% year-over-year gain to round out the top 3 cities.

Ten cities reported higher price increases in the year ended March 2015 over the year ended February 2015. Tampa led the way with a reported increase of 1.4%. Ten cities also saw their prices decrease annually, led by Cleveland -- down 1.2% in the year ending March 2015.

Month-over-month

The National index increased again in March with a 0.8%. Both the 10- and 20-City Composites increased significantly, reporting month-over-month gains of 0.8% and 0.9%, respectively. Of the 19 cities reporting increases, San Francisco led an advance of 3.0%.

Seattle followed with a reported surge of 2.3%, while Cleveland was up 0.4%, its first positive month-over-month increase since last August. New York was the only city to report a decline for March -- -0.1%.

“Home prices have enjoyed year-over-year gains for 35 consecutive months,” said David M. Blitzer, Managing Director & Chairman of the Index Committee for S&P Dow Jones Indices. “The pattern of consistent gains is national and seen across all 20 cities covered by the S&P/Case-Shiller Home Price Indices. I would describe this as a rebound in home prices, not bubble and not a reason to be fearful.”

FHFA home prices

Separately, from the Federal Housing Finance Agency (FHFA), word that its House Price Index (HPI) rose 1.3% in the first quarter of 2015 -- the fifteenth consecutive quarterly price increase in the purchase-only, seasonally adjusted index.

The seasonally adjusted monthly index for March was up 0.3% from February.

"The first quarter saw strong and widespread home price growth throughout most of the country," said FHFA Principal Economist Andrew Leventis. "Home prices are now, on average, roughly 20% above where they were 3 years ago. This run-up has been historically exceptional and is particularly notable in light of the limited household income growth and modest rate of overall inflation observed during that same time period."

The seasonally adjusted, purchase-only HPI, which is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac, rose 5.0% from the first quarter of 2014 to the first quarter of 2015, while prices of other goods and services fell 1.5%. The inflation-adjusted price of homes thus rose approximately 6.5% over the latest year.

Report highlights

• Between the first quarter of 2014 and the first quarter of 2015, home prices rose in 48 states. The top 5 states in annual appreciation:

   1. Colorado – 11.2%

2. Nevada – 10.1%

3. Florida – 8.75;

4. Washington – 7.65;

5. California – 7.5 percent.

• Among the 100 most populated metropolitan areas in the U.S., 4-quarter price increases were greatest in Oakland-Hayward-Berkeley, Calif., where prices increased by 13.4%. Prices were weakest in the Greensboro-High Point, N.C., where they fell 2.3%.
• Of the 9 census divisions, the Mountain division experienced the strongest increase in the first quarter, posting a 2.6% quarterly increase and a 6.8% increase since last year. House price appreciation was weakest in the West North Central division, where prices rose 0.7%.

The complete report is available on the FHFA website.

It's been a good 3 months for those looking to buy a home.

According to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), 66.5% of new and existing homes sold between the beginning of January and end of March were affordable to families earning the U.S. median income of $65,800. That's a gain of 3.7% from the final 3 months of 2014.

“Consumers benefited from continued low mortgage rates and some fall in the price of homes sold in the first quarter, as these conditions offer a great time to buy,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo.

The past two quarters have seen an improvement in affordability as mortgage rates remain low. “Eighty-five percent of the metropolitan areas measured experienced an increase in affordability,” said NAHB Chief Economist David Crowe. “Along with favorable home prices and pent-up demand, this broad improvement should help encourage more buyers to enter the marketplace.”

Prices head lower

The national median home price -- the point at which half the prices are higher and half are lower -- fell from $215,000 in the fourth quarter to $210,000 in the first quarter. Meanwhile, average mortgage interest fell from 4.29% to 4.03% in the same period.

For the second straight quarter, Syracuse, N.Y., was the nation’s most affordable major housing market, as 95.6% of all new and existing homes sold in the first quarter of 2015 were affordable to families earning the area’s median income of $68,500.

Also ranking among the most affordable major housing markets in respective order were Toledo, Ohio; St. Louis; Akron, Ohio; and Harrisburg-Carlisle, Pa.

Meanwhile, Sandusky, Ohio, topped the affordability chart among smaller markets in the first quarter of 2015. There, 96.3% of homes sold during the first quarter were affordable to families earning the area’s median income of $69,600. Other smaller housing markets at the top of the index included Cumberland, Md.-W.Va.; Elmira, N.Y.; Davenport-Moline-Rock Island, Iowa-Ill.; and Kokomo, Ind.

Not so affordable

For a 10th consecutive quarter, San Francisco-San Mateo-Redwood City, Calif., was the nation’s least affordable major housing market. There, just 14.1% of homes sold in the first quarter were affordable to families earning the area’s median income of $103,400.

Other major metros at the bottom of the affordability chart were Los Angeles-Long Beach-Glendale, Calif.; Santa Ana-Anaheim-Irvine, Calif.; New York-White Plains-Wayne, N.Y.-N.J.; and San Jose-Sunnyvale-Santa Clara, Calif.

All 5 least affordable small housing markets were in California. At the very bottom was Santa Cruz-Watsonville, where 21.6% of all new and existing homes sold were affordable to families earning the area’s median income of $87,000. Other small markets included Salinas, Napa, San Luis Obispo-Paso Robles, and Santa Barbara-Santa Maria-Goleta in descending order.

With the economy improving and rents rising, more people may be looking to transition into home ownership this spring. But a new report from the National Association of Realtors (NAR) suggests this year's housing market poses some stiff challenges.

In it's review of the first quarter of the year, NAR finds home prices have risen while the number of homes on the market has not kept pace. That means attractively priced real estate in good locations often draws multiple offers.

That said, some markets are more competitive than others. In some areas houses move quickly while in others, they linger on the market.

Median price up in 85% of markets

Still, the report shows the number of U.S. metros experiencing double-digit price appreciation doubled compared to last quarter. For existing single family homes, the median price increased in 85% of the measured markets.

The median price dipped in only 14%, or a total of 25 markets.

"Sales activity to start the year was notably higher than a year ago, as steady hiring and low interest rates encouraged more buyers to enter the market," said NAR Chief Economist Lawrence Yun. "However, stronger demand without increasing supply led to faster price growth in many markets."

The national median existing single-family home price in the first quarter was $205,200, up 7.4% from the first quarter of 2014. Still, that's not yet back to pre-housing crash levels.

According to the U.S. Census Bureau, the nation's median home price peaked in February 2008 at $245,300.

Sales declined

Despite the rising prices for single-family homes, the number of existing home sales actually went down in the first quarter – a quirk Yun attributes the the tighter inventory of homes for sale.

At the end of March there were 2 million existing homes available for sale in the U.S., slightly above the 1.96 million homes for sale at the end of the first quarter in 2014. But demand for homes was greater than the year before, resulting in higher sale prices.

The average supply during the first quarter was 4.6 months – down from 4.9 months a year ago. NAR says a supply of 6 to 7 months represents a healthy balance of supply between buyers and sellers.

Buyers are out there

NAR President Chris Polychron says all indicators point to renewed interest on the part of potential buyers.

"Realtors are reporting increased foot traffic this spring as more consumers are feeling confident about their financial situation and looking to lock-in before rates eventually start to climb," he said.

But he too notes that supplies of homes in many markets are tight, especially at entry level prices. Yun says one reason is because current homeowners who have accumulated equity appear reluctant to move up.

"They aren't confident they'll find another home to buy,” he said. “This trend – in addition to subpar homebuilding activity – is leading to the ongoing inventory shortages and subsequent run-up in prices seen in many markets."

Home prices posted a year-over-year increase in March for a 37^th consecutive month.

According to property information provider CoreLogic, its Home Price Index (HPI), which charts home prices nationwide -- including distressed sales -- was up 5.9% from the same period last year.

On a month-over-month basis, home prices nationwide rose 2% from February to March.

Distressed sales include short sales and real estate-owned (REO) transactions.

Twenty-seven states plus the District of Columbia were at or within 10% of their peak prices. Seven states -- including Colorado, Nebraska, New York, Oklahoma, Tennessee, Texas and Wyoming -- reached new home price highs since January 1976.

Excluding distressed sales, home prices increased by 6.1% in March 2015 compared with March 2014 and rose 2% month over month. Also excluding distressed sales, only New Mexico (-0.4%) showed year-over-year depreciation in March.

“The homes for sale inventory continues to be limited while buyer demand has picked up with low mortgage rates and improving consumer confidence,” said Frank Nothaft, chief economist for CoreLogic. “As a result, there has been continued upward pressure on prices in most markets, with our national monthly index up 2% for March 2015 and up approximately 6% from a year ago.”

Report highlights

• Including distressed sales, the 5 states with the highest home price appreciation were: Colorado (+9.2%), South Carolina (+9.1%), Kansas (+8%), Texas (+8%) and Nevada (+7.6%).
• Excluding distressed sales, the 5 states with the highest home price appreciation were: Kansas (+9.5%), Colorado (+8.5%), South Carolina (+8.2%), Florida (+7.9%) and Texas (+7.6%).
• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to March 2015) was -11%. Excluding distressed transactions, the peak-to-current change for the same period was -6.7%.
• Including distressed sales, 2 states and the District of Columbia experienced home price depreciation at the following rates: Connecticut (-0.6%), the District of Columbia (-0.2%) and Maryland (-0.1%).
• The 5 states with the largest peak-to-current declines, including distressed transactions, were: Nevada (-34.7%), Florida (-31.5%), Rhode Island (-29%), Arizona (-27.4%) and Connecticut (-25.5%).
• Ninety of the top 100 Core Based Statistical Areas (CBSAs) measured by population showed year-over-year increases in March 2015. The 10 CBSAs that showed year-over-year declines were: Baltimore-Columbia-Towson, MD; Philadelphia, PA; Camden, NJ; Hartford-West Hartford-East Hartford, CT; New Orleans-Metairie, LA; Rochester, NY; Worcester, MA-CT.; Albany-Schenectady-Troy, NY; New Haven-Milford, CT and Wilmington, DE-MD-NJ.

Looking ahead

The CoreLogic HPI Forecast indicates home prices -- including distressed sales -- will increase by 0.8% month-over-month from March 2015 to April 2015 and on a year-over-year basis by 5.1% from March 2015 to March 2016.

Excluding distressed sales, home prices are expected to increase by 0.7% month-over-month from March 2015 to April 2015 and by 4.7% year-over-year from March 2015 to March 2016.

“All signs are pointing toward continued price appreciation throughout 2015. In fact, the strong month-over-month gain in March may be a harbinger of accelerating price appreciation as we enter the spring selling season,” said Anand Nallathambi, president and CEO of CoreLogic. “Tight inventories, job growth and the inexorable impact of demographics and household formation are pushing price levels in many states, and especially large metropolitan areas like Dallas, Denver, Houston, Seattle and San Francisco, toward record levels.”

Home prices continued their rise across the country over the last 12 months, according to the S&P/Case-Shiller Home Price Indices.

Both the 10-City and 20-City Composites saw larger year-over-year increases in February than were registered the month before. The 10-City Composite jumped 4.8% year-over-year, versus January's 4.3% advance, while the 20-City Composite gained was up 5.0% following a 4.5% increase in January.

The S&P/CaseShiller U.S. National Home Price Index, which covers all 9 U.S. census divisions, recorded a 4.2% annual advance in February 2015. Denver and San Francisco reported the highest year-over-year gains, as prices increased by 10.0% and 9.8%, respectively, over the last 12 months -- the first double digit increase for Denver since August 2013.

Seventeen cities reported higher year-over-year price increases in the year ended February 2015 than in the year ended January 2015, with San Francisco showing the largest acceleration. Three cities -- San Diego, Las Vegas and Portland, Ore., -- reported that the pace of annual price increases slowed.

“Home prices continue to rise and outpace both inflation and wage gains,” said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “The S&P/Case-Shiller National Index has seen 34 consecutive months with positive year-over-year gains; all 20 cities have shown year-over-year gains every month since the end of 2012.'

Month-over-month

The National Index rebounded in February, reporting a 0.1% change for the month. Both the 10- and 20-City Composites reported significant month-over-month increases of 0.5%, their largest increase since July 2014. Of the 16 cities that reported increases, San Francisco and Denver led all cities in February with gains of 2.0% and 1.4%. Cleveland reported the largest drop as prices fell 1.0%. Las Vegas and Boston reported declines of -0.3% and -0.2% respectively.

“A better sense of where home prices are can be seen by starting in January 2000 -- before the housing boom accelerated -- and looking at real or inflation adjusted numbers,” said Blitzer. “Based on the S&P/Case-Shiller National Home Price Index, prices rose 66.8% before adjusting for inflation from January 2000 to February 2015; adjusted for inflation, this is 27.9% or a 1.7% annual rate.”

The comeback in home prices continues.

The CoreLogic Home Price Index (HPI) shows home prices nationwide -- including distressed sales -- rose 5.6% in February from the same period a year ago, marking 3 years of consecutive year-over-year increases in home prices nationally.

On a month-over-month basis, home prices nationwide -- distressed sales included -- were up 1.1%.

Distressed sales include short sales and real estate owned (REO) transactions.

Closing in on the peak

Including distressed sales, 26 states and the District of Columbia were at or within 10% of their peak prices. Six states -- including Colorado (+9.8%), New York (+8.2%), North Dakota (+7.7%), Texas (+8.5%), Wyoming (+8.4%) and Oklahoma (+5.2%) -- reached new home price highs since January 1976 when the CoreLogic HPI started.

Excluding distressed sales, home prices jumped 5.8% from February 2014 to February 2015 and 1.5% month-over-month from this past January. Also excluding distressed sales, all states and the District of Columbia showed year-over-year home price appreciation in February.

“Since the second half of 2014, the dwindling supply of affordable inventory has led to stabilization in home price growth with a particular uptick in low-end home price growth over the last few months,” said Dr. Frank Nothaft, chief economist for CoreLogic. “From February 2014 to February 2015, low-end home prices increased by 9.3% compared to 4.8% for high-end home prices, a gap that is 3 times the average historical difference.”

February highlights

• Including distressed sales, the 5 states with the highest home price appreciation were: Colorado (+9.8%), South Carolina (+9.3%), Michigan (+8.5%), Texas (+8.5%) and Wyoming (+8.4%).
• Excluding distressed sales, the 5 states with the highest home price appreciation were: South Carolina (+9.7%), New York (+9.2%), Colorado (+9%), Texas (+7.9%) and Florida (+7.8%).
• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to February 2015) was -12.2%. Excluding distressed transactions, the peak-to-current change for the same period was -7.8%.
• Including distressed sales, only Connecticut at -0.9% experienced a decline in home prices.
• The 5 states with the largest peak-to-current declines -- including distressed transactions -- were: Nevada (-35.4%), Florida (-32.4%), Rhode Island (-29.6%), Arizona (-28.4%) and Connecticut (-24.7%).
• Including distressed sales, the U.S. has experienced 36 consecutive months of year-over-year increases.
• Ninety-two of the top 100 Core Based Statistical Areas (CBSAs) measured by population showed year-over-year increases in January 2015. The 8 CBSAs that showed year-over-year declines were: Baltimore-Columbia-Towson, Md.; Philadelphia, Pa.; Hartford-West Hartford-East Hartford, Conn.; New Orleans-Metairie, La.; Rochester, N.Y.; Worcester, Mass.-Conn..; Albany-Schenectady-Troy, N.Y.; and New Haven-Milford, Conn.

“This is the hottest home price appreciation prior to the spring selling season in nine years,” said Anand Nallathambi, president and CEO of CoreLogic. “Assuming a benign interest rate environment and continued strong consumer confidence, we expect home prices to rise by an additional five percent over the next 12 months.”

The outlook

The CoreLogic HPI Forecast indicates home prices -- including distressed sales -- are will increase by 0.6 percent% over-month from February to March. and on a year-over-year basis by 5.1% from February 2015 to February 2016.

Excluding distressed sales, home prices are expected to increase by 0.5% month over month from February to March and by 4.8% year over year.  

Home prices continued their rise across the country over the 12 months ending in January, according to the S&P/Case-Shiller Home Price Indices.

At the same time, though, monthly data reveal slowing increases and seasonal weakness.

Year-over-year

Both the 10-City and 20-City Composites saw year-over-year increases, with the 10-City Composite up 4.4% and the 20-City Composite gaining 4.6%. The S&P/Case-Shiller U.S. National Home Price Index, which covers all 9 U.S. census divisions, recorded a 4.5% annual gain in January.

Denver and Miami reported the highest year-over-year gains, as prices increased by 8.4% and 8.3%, respectively. Fourteen cities reported higher price increases in the year ended January 2015 over the year ended December 2014.

Chicago led the way with a reported increase of 2.5% -- up 11 basis points from December. Six cities reported declines, with San Francisco leading the declining annual returns with a reported rate of 7.9%, compared with 9.4% annually.

"The combination of low interest rates and strong consumer confidence based on solid job growth, cheap oil and low inflation continue to support further increases in home prices" says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices. "Regional patterns in recent months continue: strength in the west and southwest paced by Denver and Dallas with results ahead of the national index in the California cities, the Pacific Northwest and Las Vegas. The northeast and Midwest are mostly weaker than the national index.”

Month-over-month

The news wasn't quite as good on a month-over-month basis. The National index declined for the fifth consecutive month in January, reporting a -0.1%. Both the 10- and 20-City Composites reported virtually flat month-over-month changes.

Of the 9 cities that reported increases, Charlotte, Miami, and San Diego led all cities in January with increases of 0.7%. San Francisco reported the largest decrease of all 20 cities -- -0.9%. Seattle and Washington, D.C., reported decreases of -0.5%. Unusually cold and wet weather may have weakened activity in some cities.

"Despite price gains, the housing market faces some difficulties”, said Blitzer. “Home prices are rising roughly twice as fast as wages, putting pressure on potential home buyers and heightening the risk that any uptick in interest rates could be a major setback.

He also pointed out that the new home sector is weak. “Residential construction is still below its pre-crisis peak,” he said. “Any time before 2008 that housing starts were as low as the current rate of one million, the economy was in a recession."

For the 35^th month in a row, home prices have posted a year-over-year gain

CoreLogic reports its January Home Price Index (HPI) shows that home prices nationwide increased 5.7% last month from the same period a year ago. On a month-over-month basis, home prices nationwide were up 1.1% from December 2014. Both readings include distressed sales -- short sales and real estate owned (REO) transactions.

“House price appreciation has generally been stronger in the western half of the nation and weakest in the mid-Atlantic and northeast states,” said Dr. Frank Nothaft, chief economist at CoreLogic. “In part, these trends reflect the strength of regional economies.”

Colorado and Texas have had stronger job creation and have seen 8 to 9% price gains over the past 12 months in the combined indexes. In contrast, values were flat or down in Connecticut, Delaware and Maryland in the overall index -- including distressed sales.

Including distressed sales, 27 states and the District of Columbia are at or within 10% of their peak. Four states, New York (+5.6%), Wyoming (+8.3%), Texas (+8.3%) and Colorado (+9.1%), reached new highs in the home price index since January 1976 when the index started.

Excluding distressed sales, home prices increased 5.6% from January 2015 to January 2014 and increased 1.4% month over month compared to December 2014. Also excluding distressed sales, all states and the District of Columbia showed year-over-year home price appreciation in January.

Report highlights

• Including distressed sales, the 5 states with the highest home price appreciation were Colorado (+9.1%), Michigan (+9.0%), Texas (+8.3%), Wyoming (+8.3%) and Nevada (+7.6%).
• Excluding distressed sales, the 5 states with the highest home price appreciation were Colorado (+8.1%), Nevada (+7.9%), Texas (+7.8%), Massachusetts (+7.7%), and Oregon (+7.4%).
• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to January 2015) was -12.7%. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -8.6%.
• Including distressed sales, only Maryland and Connecticut showed losses (-0.3% and -1.9% respectively). The 5 states with the largest peak-to-current declines, including distressed transactions, were Nevada (-35.3%), Florida (-32.6%), Rhode Island (-29.9%), Arizona (-28.6%) and Connecticut (-24.8%).
• Including distressed sales, the U.S. has experienced 35 consecutive months of year-over-year increases; however, the national increase is no longer posting double-digits.
• Ninety-four of the top 100 Core Based Statistical Areas (CBSAs) measured by population showed year-over-year increases in January. The 6 CBSAs that showed year-over-year declines were New Orleans-Metairie, La,; Bridgeport-Stamford-Norwalk, Conn,; Rochester, N,Y,; Baltimore-Columbia-Towson, Md.; Wilmington, Del.,-Md.,-N.J.; and Hartford-West Hartford- East Hartford, Conn.

The forecast

“We continue to see a strong and progressive uptick in home prices as we enter 2015. We project home prices will continue to rise throughout the year and into 2016,” said Anand Nallathambi, president and CEO of CoreLogic. “A dearth of supply in many parts of the country is a big factor driving up prices. Many homeowners have taken advantage of low rates to refinance their homes, and until we see sustained increases in income levels and employment they could be hunkered down so supplies may remain tight. Demand has picked up as low mortgage rates and the cut in the FHA annual insurance premium reduce monthly payments for prospective home buyers.”

The CoreLogic HPI Forecast indicates home prices -- including distressed sales -- will increase 0.4% month-over-month from January 2015 to February 2015 and, on a year-over-year basis, by 5.3% from January 2015 to January 2016.

Excluding distressed sales, home prices are expected to increase 0.3% month-over-month from January 2015 to February 2015 and by 4.9% year-over-year from January 2015 to January 2016.