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Home >> Daily Dose >> By Any Measure, Home Prices are Way Up
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By Any Measure, Home Prices are Way Up

priceHome prices have been steadily rising since bottoming out in early 2012, posting 50-plus consecutive months of appreciation, according to multiple industry reports.

The Federal Housing Finance Agency (FHFA)’s House Price Index (HPI) for November 2016 indicated that prices on homes jumped by 0.5 percent over-the-month and 6.1 percent over-the-year based on home sales price information on mortgages sold to or guaranteed by Fannie Mae and Freddie Mac during November.

The percentage of home price appreciation reported by the FHFA for GSE-backed mortgages in November is a continuation of appreciation data found in other recent industry reports. CoreLogic reported a 6.7 percent over-the-year increase in home prices in October, marking the 54th consecutive month of year-over-year appreciation, led by major markets such as Boston, Los Angeles, Miami, and Denver.

Black Knight Financial Services found a similar trend in home price appreciation for October: 54 straight months of over-the-year gains, including October’s increase of 5.6 percent. Black Knight reported the median home value for October at $266,000, which is up by one-third from the trough reached in January 2012 and only 0.4 percent from a new national peak.

The National Association of Realtors (NAR) revealed recently in its existing-home sales report for December 2016 that existing-home prices had risen by 4 percent over-the-year up to a median price of $232,200, which they reported as the 58th straight month of home price appreciation.

A large driver of the recent home price appreciation is supply not keeping up with demand. According to NAR, the number of existing homes available for sale in December was 1.65 million, a 6.3 percent decline from December 2015 and the lowest number since 1999 when NAR began tracking the data. That and the fact that new home construction is far below its historical pace have translated to a concern over affordability, according to NAR Chief Economist Lawrence Yun.

“Housing affordability for both buying and renting remains a pressing concern because of another year of insufficient home construction,” Yun said. "Given current population and economic growth trends, housing starts should be in the range of 1.5 million to 1.6 million completions and not stuck at recessionary levels. More needs to be done to address the regulatory and cost burdens preventing builders from ramping up production.”

Click here to view the FHFA’s House Price Index for October 2016.

About Author: Brian Honea

Brian-Honea-906x1024
Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.

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