Wednesday, July 03, 2013

Trulia: Asking Home Prices increased in June

by Bill McBride on 7/03/2013 09:19:00 PM

This was released earlier today: Trulia Reports Asking Home Prices Up 10.7 Percent Year-over-year Nationally as Mortgage Rates Rise

Nationally, asking home prices rose 10.7 percent year-over-year (Y-o-Y) in June. Even excluding foreclosures, prices jumped 11.4 percent Y-o-Y, signaling that the current rise in prices is not primarily driven by the shift away from foreclosure to non-distressed homes for sale. However, asking prices will eventually slow down as mortgage rates rise, inventory expands, and investor demand falls.

Nationally, asking home prices bottomed in February 2012 – but the turnaround has been uneven. Prices first rebounded two years ago in San Jose, Phoenix, Denver, Miami, and a few other housing markets where job growth or bargain buying started boosting prices earlier. Meanwhile, prices continued to fall in several East Coast and Midwest markets until three to six months ago. Now with the housing recovery in full swing, asking prices rose in 99 of the 100 largest metros.

Marking its biggest Y-o-Y increase since January, rents rose 2.8 percent Y-o-Y nationally in June. Rents climbed most in Houston, Miami, and Tampa-St. Petersburg, but fell where asking prices are up more than 30 percent: Las Vegas, Oakland, and Sacramento. In fact, home prices outpaced rents in 22 of the 25 largest rental markets. Only in Houston, New York, and Philadelphia did rents rise faster than home prices.

“Rising home prices have swept the country,” said Jed Kolko, Trulia’s Chief Economist. “Local markets that suffered most during the housing crisis are seeing the biggest price rebounds today. Now even markets that escaped the worst of the bust, like Chicago and Baltimore, are seeing prices climb. However, these runaway price gains won’t last: both rising mortgage rates and slowly growing inventories should start tapping the brakes on home prices, preventing them from rising back into bubble territory.”
emphasis added
Note: These asking prices are SA (Seasonally Adjusted) - and adjusted for the mix of homes - and this suggests further house price increases over the next few months on a seasonally adjusted basis.

More from Kolko: Asking Home Prices Not Cooling Off – Yet

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