Rising demand and limited supply continued to drive home prices up in November, according to the latest Residential Price Index (RPI) data from ""FNC, Inc"":http://www.fncinc.com/.[IMAGE]
Based on recorded sales of non-distressed properties--including both new and existing homes--in the 100 largest metropolitan statistical areas (MSAs), the FNC 100-MSA composite index shows prices rising 0.3 percent at the national level in November.
According to FNC, November was the ninth straight month to see prices climb higher, leading to a total appreciation rate of 5.3 percent year-to-date. For the 12 months ending in November, prices rose 4.2 percent, the largest year-over-year increase since October 2006.
While rising sales and moderate economic growth are helping fuel price gains, FNC says the recovery is mostly being driven by the forces of supply and demand at this point.[COLUMN_BREAK]
""An imbalance between rising demand and limited supply continues to be an important factor for sustained price momentum,"" FNC said in a release. ""While signs of market recovery have instilled confidence and driven up demand as potential homebuyers take advantage of low prices, the supply of homes for sale has been constrained due to rising homeowners' expectations about a continued price increase in many fast-rising markets.""
The price recovery is being helped along by declines in foreclosure sales, which sell at deep discounts and drag down surrounding prices. According to FNC, foreclosures made up 20 percent of total home sales in November, up from 17.6 percent in October but down from 24.8 percent year-over-year.
FNC's smaller-scale indices show similar trends. Nineteen of the markets tracked in the FNC 30-MSA composite showed month-over-month price improvement, with Las Vegas leading the pack (3.4 percent over October). On a yearly basis, Phoenix outpaces the rest of the country by a wide margin, reporting a 21.4 percent price improvement from November 2011.
At the other end of the spectrum, Chicago continues to lag in terms of price gains, posting 1.8 percent depreciation from October and 0.8 percent depreciation from November 2011.
Year-to-date, all markets in the 30-MSA composite are up, with Phoenix ranking at the top (23.6 percent) and Chicago trailing at the bottom (0.7 percent).