Home prices climb in 87% of U.S. cities amid recovery
Bloomberg
Prices for single-family homes climbed in 87 percent of U.S. cities in the second quarter as the national housing recovery accelerated amid competition for a limited number of properties on the market.
The median transaction price rose from a year earlier in 142 of 163 metropolitan areas measured, the National Association of Realtors said in a report today. A year earlier, 75 percent of regions had gains.
Values are increasing as homebuyers, encouraged by improving employment, compete for a tight supply of listed properties. At the end of the second quarter, 2.19 million previously owned homes were available for sale, 7.6 percent fewer than a year earlier, according to the Realtors group.
“There continue to be more buyers than sellers, and that is placing pressure on home prices, with multiple bids common in some areas of the country,” Lawrence Yun, chief economist for the National Association of Realtors, said in the report.
The median price for an existing single-family home was $203,500 nationally in the second quarter, up 12 percent from a year earlier. That was the biggest gain since the fourth quarter of 2005, according to the Realtors group.
Cities with tight supplies of homes for sale had the strongest price growth, the Realtors said. Eight markets were added to the report in the quarter.
Biggest Gains
The best-performing areas were Sacramento, California, and Atlanta, where prices jumped 39 percent from a year earlier. Prices rose 36 percent in Fort Myers, Florida; 33 percent in Reno, Nevada; and 31 percent in Las Vegas.
The Peoria, Illinois, area had the biggest decline, falling 9.2 percent from a year earlier. Following were Florence, South Carolina, with an 8.4 percent drop, and Erie, Pennsylvania, with a 5.7 percent decrease. Prices fell 5 percent in Pittsfield, Massachusetts, and 4.8 percent in Decatur, Illinois.
The housing recovery is strengthening amid a drop in the unemployment rate, which fell to 7.4 percent in July from 7.6 percent the previous month, according to Labor Department data.
Rising borrowing costs may hurt future demand. Mortgage rates for 30-year loans have climbed from a near-record low of 3.35 percent in early May, rising to 4.4 percent in the week ended today, according to McLean, Virginia-based Freddie Mac.
“Higher interest rates are now causing sales to level out, but the tight supply conditions look to be with us for the balance of the year in most of the country,” Yun said.
‘Sustained Recovery’
While rising borrowing costs may spur more buyers to jump into the market soon to lock in interest rates before they climb even higher, the gain in home prices is likely to slow in the second half of the year, said Millan Mulraine, director of U.S. rates research at TD Securities in New York. The effects of higher loan costs won’t be dramatic enough to have a major impact on the housing recovery, he said.
“Up until the middle of this year, the housing sector was essentially beginning to show signs of a strong and sustained recovery,” Mulraine said in a telephone interview. “We do expect to see further improvement in prices, but not to the extent that we saw in the first half of this year.”
In a separate report today, the Mortgage Bankers Association said that the share of seriously delinquent U.S. mortgages — those more than 90 days behind or in the foreclosure process — plunged to the lowest level in almost five years. As the housing recovery strengthens, delinquent borrowers have been able to catch up on payments or seek loan modifications.
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Median Sales Price of Existing Single-Family Homes for Metropolitan Areas
Pricing Data
Single Family 2nd Quarter 2013
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Pricing Data
Condo 2nd Quarter 2013
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London leads U.K. home prices to record as sales rise
By Craig Stirling
Bloomberg
London’s property boom drove U.K. house prices to a new record in July as transactions reached the highest in four years amid improving confidence, Acadametrics Ltd. said.
British home values increased 0.3 percent from June to an average of 232,969 pounds ($362,300), the London-based real-estate researcher and LSL Property Services Plc said in a report today. While prices climbed 2.6 percent from a year earlier, the increase was 1 percent if London is excluded from the index.
The report chimes with a range of gauges showing gains in property values stoked by international demand for homes in the capital, loosening mortgage availability and Treasury measures to aid the real-estate market. It also underlines the contrast between London’s buoyancy and a more subdued picture elsewhere.
“Domestic and foreign buyers’ interest for bricks and mortar in London appears to be undiminished,” said David Brown, LSL’s commercial director. “Without a sudden rush of properties hitting the market, prices will rise even more over coming months. The bottom line is that the divide between London and the rest of the U.K. housing market is deepening.”
Acadametrics estimates that completed housing transactions reached 68,000 in July after a “gradual increase” this year compared with 2012. That’s the highest monthly total since 2009 and the most for a July since 2007, when the financial crisis struck.
“The main factor has been the easing of credit conditions, enabling more potential purchasers to obtain a mortgage,” said Peter Williams, chairman of Acadametrics. “The mortgage lenders have been assisted by the Bank of England’s Funding for Lending Scheme, which has resulted in more competitive products being offered in the market place.”
First Timers
He cautioned that, however buoyant overall U.K. house prices may appear, first-time buyer transactions approaching 250,000 per year remain below their long-run average of 500,000.
Williams and Brown emphasized that the London property market, fueled by foreign buyers, is distorting the overall picture of Britain’s house prices. Other reports including one this week by Halifax (UKHBSAMM), the mortgage unit of Lloyds Banking Group Plc, also showed values increased in July.
There are “parts of London operating at an entirely different level from the rest of country, and even from the rest of the capital,” Brown said.
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