Thursday, December 17, 2015

FNC: Residential Property Values increased 5.9% year-over-year in October

by Bill McBride on 12/17/2015 08:37:00 PM

In addition to Case-Shiller, and CoreLogic, I'm also watching the FNC, Zillow and several other house price indexes.

FNC released their October 2015 index data.  FNC reported that their Residential Price Index™ (RPI) indicates that U.S. residential property values decreased 0.1% from September to October (Composite 100 index, not seasonally adjusted). 

The 10 city MSA decreased 0.1% (NSA), the 20-MSA RPI increased 0.1%, and the 30-MSA RPI increased 0.1% in October. These indexes are not seasonally adjusted (NSA), and are for non-distressed home sales (excluding foreclosure auction sales, REO sales, and short sales).

Notes: In addition to the composite indexes, FNC presents price indexes for 30 MSAs. FNC also provides seasonally adjusted data.

From FNC: FNC Index: Home prices slipped 0.1% after a nine-month run

The latest FNC Residential Price Index™ (RPI) indicates that U.S. home prices pulled back in October, ending a nine-month run of increases buoyed by low mortgages rates and rising credits. Nationwide, home prices fell 0.1% between September and October, led by declines in some of the country’s largest housing markets. October’s year-over-year growth remains unchanged from the prior month at a solid 5.9%.

“In a relatively stable market like today’s, it is normal that home prices retreat to flat or negative growth territory as home sales subside entering the fall and winter months,” said Yanling Mayer, FNC’s housing economist and Director of Research.

“On the upside, low interest rates and the leverage provided by loans under affordable housing programs help maintain affordability and partly offset the impact on affordability from months of rapidly rising prices. With a much anticipated policy rate increase to affirm the strength of the U.S. economy, we will likely be looking at a milder seasonal slowdown and possibly a sooner return of market rebound in 2016,” continued Mayer.
The year-over-year (YoY) change was the same in October as in September.

The index is still down 14.6% from the peak in 2006 (not inflation adjusted).

Click on graph for larger image.

This graph shows the year-over-year change based on the FNC index (four composites) through October 2015. The FNC indexes are hedonic price indexes using a blend of sold homes and real-time appraisals.

Most of the other indexes are also showing the year-over-year change in the mid single digit range. For example, Case-Shiller was up 4.9% in September, CoreLogic was up 6.8% in October.

Note: The October Case-Shiller index will be released on Tuesday, December 29th.