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Home Prices See Greatest Yearly Gain Since 2005

S&P Dow Jones Indices released Tuesday its S&P/Case-Shiller Home Price Indices for December, showing national prices up 11.3 percent as of year-end, a slight pickup over the previous quarter’s annual improvement of 11.2 percent. The national index covers all nine U.S. census divisions. While prices were strong in Q4 compared to the previous year, they were down relative to Q3, dropping 0.3 percent.

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Prices Crawl Up 0.1% in December Index

The Data & Analytics division of Black Knight Financial Services released on Monday its latest Home Price Index (HPI), noting an increase of 0.1 percent in home prices to $232,000 for the month of December. The largest states experienced varying degrees of home price changes: California experienced no change; Florida rose 0.6 percent; New Jersey fell 0.1 percent; New York rose 0.7 percent; and Texas rose 0.4 percent.

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As Student Debt Rises, Would-Be Homeowners Forced to Choose

In a February survey of nearly 2,000 homebuyers, Redfin found that 16 percent of first-timers (who made up about half of the total survey group) have been held back from purchasing in the past by student loan debts. Out of all homebuyers surveyed, one-third said student debt had led them to put off purchasing for one to two years, while slightly less than that said they had to delay for four years or more.

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Builder Study Shows Signs of Stabilizing Affordability

While most other reports have indicated a decline in Americans’ ability to pay for homes at the national median price ($205,000 as of Q4), NAHB’s latest index actually shows relative stability, with 64.7 percent of new and existing homes sold in Q4 classified as “affordable” to families earning the median income of $64,400. That result is a slight step up from the index reading of 64.5 percent recorded in Q3.

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Mortgage Risk Continues to Climb

Last month’s implementation of the Consumer Financial Protection Bureau’s (CFPB) qualified mortgage (QM) guidelines did little to stem the rise of mortgage risk across the nation, according to the latest from the American Enterprise Institute (AEI). The group’s National Mortgage Risk Index (NMRI), a measure of loan performance under stressful economic conditions, increased to a reading of 11.8 percent in January.

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Declining Affordability: Shock or Not?

Yes, affordability (as measured by the National Association of Realtors' Housing Affordability Index) is down as much as 22 percent from its January 2013 peak, but is still far higher than it was in the early 2000s, says CoreLogic chief economist Mark Fleming in the company's February MarketPulse report. Moreover, Fleming notes the problem of "unaffordable housing" is one that only really exists for first-time homebuyers.

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Home Listings Up 3.1% in January

Realtor.com's latest National Housing Trends Report uncovers some positive indicators for the year ahead, not the least of which is a recovery in supply. "In January 2013, just 8 markets registered increases in inventory. This January, 83 markets (58 percent) of the 143 markets tracked by realtor.com showed increases in inventory, year-over-year," the report said.

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Existing-Home Sales Fall to Lowest Level in 18 Months

Existing-home sales slowed last month to a seasonally adjusted annual rate of 4.62 million—their lowest level in a year and a half—as ongoing inventory constraint lifted prices, the National Association of Realtors (NAR) reported Friday. The drop represents a 5.1 percent decline compared to both December and January last year. On just the single-family side, sales were down to a rate of 4.05 million.

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Competition to Decline as Year Progresses

Home buying competition rose over the month of January but was down from last January, according to national real estate brokerage Redfin, which took the year-over-year decline as a sign that low inventory and rising prices are thwarting demand in the housing market. About 58 percent of home offers by Redfin agents encountered a competing offer in January compared to nearly 53 percent in December.

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Leading Indicators Show Signs of Economic Stability

The Conference Board’s Leading Economic Index (LEI) for January increased 0.3 percent to 99.5, the group reported Thursday. Also released Thursday were the Conference Board Coincident Economic Index and the Lagging Economic Index, which both ticked up slightly. Together, the three indexes represent observed changes in average weekly hours, building permits, stock prices, consumer expectations for business conditions, and more.

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