Home prices in January were unchanged from December and they barely remained in the black compared to a year ago, but rebounded in January, according to the most current national market report.
National home prices in January rose 5.4 percent over the prior year, a continuation of 2012’s positive trajectory, according to Clear Capital’s Home Data Index. The main driving force in markets across the U.S. continued to be the lower tier price segment, those homes selling for $102,000 and less, of which many are REO sales. While the national REO saturation rate in January held at 18.4 percent, well off the peak of 41.0 percent in March 2009, REO properties remain attractive to investors and homebuyers alike. REO sales continue to make an impact on the overall health and recovery of the housing market. The HDI’s equal weighting of REOs alongside fair market transactions provides the most accurate picture of the current state of the housing market.
The West recorded the highest yearly growth of all the regions, at 12.9 percent. As the market adjusts to a higher price floor and declining REO saturation, its likely future price trends will moderate. REO saturation in the West in now at just 17.2 percent, drastically improved from the peak of 52.5 percent in March 2009. The correlation between price trends and REO saturation continues to be a key indicator of market performance.
The South also continued to make progress, with yearly gains of 4.5 percent in January. The recovery in the South has a long way to go before total losses of 33.1 percent are recouped. January home prices in the Northeast rose 2.4 percent over the last year. While this rate of growth is the lowest out of all the regions, it’s an impressive jump over December’s yearly rate of growth of 1.5 percent.
Yearly price gains of 2.7 percent in the Midwest retreated slightly when compared to last month’s 3.0 percent rate of growth. Similar to quarterly trends, some large markets in the Midwest, like Chicago, haven’t fueled yearly growth. Meanwhile Detroit, with yearly gains of 7.1 percent, aided the region’s yearly gains overall