Home Prices and Equity Rise as Affordability Lowers

 

ATTOM Data Solutions reported This Week in Real Estate that the number of equity rich U.S. properties increased to a new high in the third quarter of 2018. Below are a few highlights from the first week of November that influence our business:

Equity Rich U.S. Properties Increase to New High of 14.5 Million in Q3 2018
On Thursday ATTOM Data Solutions released its Q3 2018 U.S. Home Equity & Underwater Report, which shows that in the third quarter of 2018, nearly 14.5 million U.S. properties were equity rich – where the combined estimated amount of loans secured by the property was 50 percent or less of the property’s estimated market value – up by more than 433,000 from a year ago to a new high as far back as data is available, Q4 2013. The 14.5 million equity rich properties in Q3 2018 represented 25.7 percent of all properties with a mortgage, up from 24.9 percent in the previous quarter but down from 26.4 percent in Q3 2017. “West coast markets along with New York have the highest share of equity rich homeowners while markets in the Mississippi Valley and Rust Belt continue to have stubbornly high rates of seriously underwater homeowners when it comes to home equity,” said Daren Blomquist, senior vice president with ATTOM Data Solutions. States with the highest share of equity rich properties were California (42.5 percent); Hawaii (39.4 percent); Washington (35.3 percent); New York (34.9 percent); and Oregon (33.6 percent).

Housing Affordability Edges Lower in the Third Quarter
A modest increase in interest rates and home prices kept housing affordability at a 10-year low in the third quarter of 2018, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI). In all, 56.4 percent of new and existing homes sold between the beginning of July and end of September were affordable to families earning the U.S. median income of $71,900. This is down from the 57.1 percent of homes sold in the second quarter that were affordable to median-income earners and the lowest reading since mid-2008. The national median home price edged up from $265,000 in the second quarter of 2018 to $268,000 in the third quarter. This is the highest quarterly median price in the history of the HOI series. At the same time, average mortgage rates rose by a nominal 5 basis points in the third quarter to 4.72 percent from 4.67 percent in the second quarter.

CoreLogic Reports September Home Prices Increased by 5.6% Year Over Year
CoreLogic released on Tuesday the CoreLogic Home Price Index (HPI) and HPI Forecast for September 2018, which shows home prices rose both year over year and month over month. Home prices increased nationally by 5.6 percent year over year from September 2017. On a month-over-month basis, prices increased by 0.4 percent in September 2018. Looking ahead, the CoreLogic HPI Forecast indicates home prices will increase by 4.7 percent on a year-over-year basis from September 2018 to September 2019. On a month-over-month basis, home prices are expected to decrease by 0.6 percent from September to October 2018. The CoreLogic HPI Forecast is a projection of home prices calculated using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

 

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