The superlatives are getting
tired – historic, record setting – but they have to come into play again with
the March home price gains. A spokesperson for S&P CoreLogic Case-Shiller called
the annual gains in those indices the highest in 15 years while the Federal
Housing Finance Agency (FHFA) said the growth in its data was more than twice
that posted a year earlier.

The Case-Shiller National
Home Price Index increased at an annual rate of 13.2 percent in March, 1.2
point higher than the annual rate in February. The 10-City Composite Index rose
12.8 percent compared to 11.7 the prior month while the increase in the 20-City
Composite was 13.3 percent, up from 12.0 percent.



a month-over-month basis, the National Index rose 1.5 percent on a seasonally
adjusted basis and 2.0 percent unadjusted. The 10-City and 20-City Composites posted
increases of 2.0 percent and 2.2 percent respectively before adjustment and 1.4
percent and 1.6 percent afterward. All 20 cities had monthly gains, both before
and after seasonal adjustments.

San Diego, and Seattle saw the largest year-over-year gains again in March. For
the 22nd straight month the greatest appreciation was in Phoenix at
20.0 percent
, followed by San Diego at 19.1 percent and Seattle with an 18.3
percent increase. All 20 cities reported higher price gains in the year ending
March 2021 versus the year ending February 2021. Prices were strongest in the
West with a regional increase of 15.1 percent, but every region rose by double-digits.

Massive home buying demand shows no signs of
despite some rise in mortgage rates and concerns of overheated home
price growth,” CoreLogic Deputy Chief Economist Selma Hepp said. “At
the same time, hopes that new listings would proliferate as mass vaccinations
encourage baby boomers to list their homes is showing little signs of taking
place. Thus, pressures on home prices continued to mount and S&P CoreLogic
Case-Shiller Index surged 13.2 percent  year over year in March. The month-to-month
index jumped 1.95 percent, making it the strongest February-to-March increase
in recorded history of data.”

Craig J. Lazzara, Managing
Director and Global Head of Index Investment Strategy said, “Housing prices
continued to rise robustly in March 2021. The National Composite Index marked
its tenth consecutive month of accelerating prices. The market’s strength is
broadly-based: all 20 cities rose, and all 20 gained more in the 12 months
ended in March than they had gained in the 12 months ended in February.

“More than 30 years of
S&P CoreLogic Case-Shiller data put these results into historical context.
The National
Composite’s 13.2 percent gain was last exceeded more than 15 years ago in
December 2005, and lies very comfortably in the top decile of historical
performance. The unusual strength is reflected across all 20 cities; March’s
price gains in every city are above that city’s median level, and rank in the
top quartile of all reports in 19 cities.

data are consistent with the hypothesis that COVID has encouraged potential
buyers to move from urban apartments to suburban homes. This demand may
represent buyers who accelerated purchases that would have happened anyway over
the next several years. Alternatively, there may have been a secular change in
preferences, leading to a permanent shift in the demand curve for housing. More
time and data will be required to analyze this question.

S&P CoreLogic Case-Shiller Home Price Indices are constructed to accurately
track the price path of typical single-family home pairs for thousands of
individual houses from the available universe of arms-length sales data. The
National U.S. Home Price Index tracks the value of single-family housing within
the United States. The indices have a base value of 100 in January 2000; thus,
for example, a current index value of 150 translates to a 50 percent
appreciation rate since January 2000 for a typical home located within the
subject market.

As of March
2021, the National Index was at 243.66 
compared to 238.83 in February. The 10- and 20-CityComposites had
readings of  264.77 and 251.66, up from
to 259.50 and 246.04 the prior month. Los Angeles has the highest index reading
at 332.91. Detroit ousted Cleveland from the bottommost post on the index at

House Price Index (HPI) puts the annual increase in March at 12.6 percent with
a 3.5 percent increase in the first quarter of 2021 compared to the fourth
quarter of 2020. Prices grew by 1.4 percent month-over-month. House prices have
risen every quarter since September 2011, 39 consecutive quarters.  

“House price growth
over the prior year clocked in at more than twice the rate of growth observed
in the first quarter of 2020,
just before the effects of the pandemic were felt
in housing markets,” said Dr. Lynn Fisher, Deputy Director of FHFA’s Division
of Research and Statistics. “In March, rates of appreciation continued to
climb, exceeding 15 percent over the year in the Pacific, Mountain and New
England census divisions.”




House prices rose
in all 50 states and the District of Columbia between the first quarters of
2020 and 2021 with the greatest appreciation in Idaho (23.7 percent), Utah
(19.2 percent), Arizona 17.4 percent), New Hampshire and Connecticut (16.2 and
15.9 percent, respectively.) The smallest gains were in Hawaii, Louisiana, Wyoming,
North Dakota, and Mississippi, all below 8.2 percent. Prices were up in 99
of the 100 largest metro areas
, declining only in Urban Honolulu.




Of the nine census
divisions, the Mountain division experienced the strongest four-quarter
appreciation, posting a 15.7 percent gain between the first quarters of 2020
and 2021 and a 4.8 percent increase in the first quarter of 2021. That division
has led in annual growth for 14 quarters. Appreciation was weakest in the West
South Central division, but prices still were up by 11.1 percent between the
first quarters of 2020 and 2021. 

FHFA’s HPI is based
on the sales prices of homes purchased using financing from either Fannie Mae
or Freddie Mac. The Index was benchmarked in January 1991 at 100 and was at
324.9 in March.

By Jann Swanson , dated 2021-05-25 11:46:27

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Courtesy of Mortgage News Daily

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