In November, home prices climbed 0.8%, increasing 15.3% year over year, according to First American’s Real House Price Index.
First American Chief Economist Mark Fleming said throughout 2018, consistent growth among mortgage rates, household income and unadjusted house prices defined the housing market.
“November 2018 was no exception, as household income, mortgage rates, and the unadjusted house price index all increased compared with a year ago. The 30-year, fixed-rate mortgage increased by nearly 1% and the unadjusted house price index jumped 6.7%," Fleming said. "Household income increased 3.5% since November 2017, which boosted consumer house-buying power, but the RHPI still increased 15.3% compared with last November due to the rise in mortgage rates and unadjusted house prices."
According to First American’s data, unadjusted house prices sit 1.8% above the housing boom peak. Interestingly, consumer buying power fell 0.04% between October and November, declining 7.5% year over year.
When consumer house-buying power is factored in, home prices are actually 35.3% below their 2006 peak and 9% below prices from January 2000.
First American also notes that real house prices declined in six cities, signaling an improvement in affordability.
According to the company's data, the six markets that experienced a month-over-month decline in the RHPI were San Jose (-0.7%), Boston (-0.4%), Portland (-0.2%), Pittsburgh (-0.2%), San Diego (-0.1%) and Seattle (-0.1%).
“These six outliers may signal a broader shift in the housing market. Not only did affordability increase in these six markets, but monthly real house price appreciation slowed in the other 38 markets we track,” Fleming said. “Recent inventory increases and the slowdown in house price appreciation are not coincidences and may be the first signs of a weakening sellers’ market, which is good news for home buyers.”
Published at Mon, 28 Jan 2019 19:36:00 +0000