Existing home prices increased again in May. Only new home prices weakened a bit in the month but reversed that decline in June. Over the year, home prices are down a bit, but the decline is generally smaller, especially in the distressed-excluded data. June data looks even better as there are year over year gains in early data.
Housing market activity is seasonal, so year over year comparisons are typically the most informative. However, the expiration of the tax credit one year ago makes year over year comparisons less informative than usual this period.
Data continue to show that new homes have better price performance over the year; low levels of new construction and very little activity in the new home sector should help maintain this trend though low sales levels also contribute to the substantial volatility in the data.
Distressed sales , which hold back existing home prices, continued to trend down. In June they were 30 percent of all sales.
Data from the REALTORS® Confidence Index show that the share of distressed sales peaked in the first quarter of 2009 and 2010.
Stable inventories coupled with the seasonal boost in sales activity will also help support prices. Further, rising apartment rents and stable affordability conditions make a home purchase a good alternative to rental housing.
Continued job growth, confidence, and available financing are necessary for consumers to take advantage of buying opportunities. Tight credit spurred by proposed QRM rule changes may hold future buyers back. Learn more about the QRM here .
Home Prices Sources: NAR, Case-Shiller, CoreLogic, FHFA, Census, HAVER
Home Price Data – Year over Year Change Sources: NAR, Case-Shiller, CoreLogic, FHFA, Census, HAVER
Home Price Changes *All data are not seasonally adjusted. Monthly changes should typically be computed only for Seasonally Adjusted (SA) data. Because these change rates are often covered in the media regardless of their suitability for analysis, they are presented here but should be used with caution. Annual (yr-over-yr) changes computed for Not Seasonally Adjusted (NSA) data give a measure that is not affected by seasonal fluctuations. Sources: NAR, Case-Shiller, CoreLogic, FHFA, Census, HAVER
Spread of Existing Home Price Changes Year over Year Sources: NAR, Case-Shiller, CoreLogic, FHFA, HAVER
Supply and Demand Factors – Inventory Sources: NAR
Supply – New Housing Starts and Permits Sources: Census
Underlying Demand – Job Growth and Hires Sources: BLS