Lackluster year over year home price performance continued in March and April though monthly performance was better. Series for which we have April data showed improvement—smaller declines in the year.
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.
NAR and Census data continue to show that new homes have better price performance; low levels of new construction and very little activity in the new home sector should help maintain this trend.
Distressed sales , which hold back existing home prices, trended down in April for the first time since November to around a quarter of all sales. The distressed-excluded price series is much more stable.
Data from the REALTORS® Confidence Index show that the share of distressed sales peaked in the first quarter of 2009 and 2010.
April data suggests that the pattern may also hold in 2011. This would mean that price performance is likely to improve in the months ahead. Stable inventories coupled with the seasonal boost in sales activity will also help support prices.
While higher shares of distressed sales hold back prices, they clear shadow inventory more quickly. Substantial variation in distressed sales by state will affect performance in your market. See NAR’s State by State estimate of Shadow Inventory for insight into your area.
Affordability remains high, but job growth, confidence, and available financing are necessary for consumers to take advantage. Tight credit may currently hold some potential buyers back.
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