Tag Archives: Pound Ridge NY Homes

Pound Ridge NY Homes

Why lumber prices have nearly tripled again since cratering a few months ago | Pound Ridge Real Estate

Simple economics popped the lumber bubble last year. Once the price of lumber topped $1,515 per thousand board feet in the spring, do-it-yourselfers en masse stopped buying. At the same time, sawmills trying to cash in on the sky-high prices increased production, contributing to prices plummeting by August to $389 per thousand board feet. Suddenly, lumber buyers, who were used to paying $350 to $500 per thousand board feet prior the pandemic, felt some serious relief.

End of the story, right? Not at all. Since bottoming in August, lumber has gone on another run that’s starting to look a lot like the historic run we saw last spring. As of Friday, the cash market price is back up to $1,111 per thousand board feet. That’s up 186% (or almost triple) above its bottom price in August.

But the dynamics pushing up prices are very different this time. During the last go around, pandemic lockdowns had limited production just as remote working set off a home renovation boom and recession-induced low mortgage rates spurred more demand for homebuilding. Instead of lockdowns, blame mother nature this time. The bad wildfire season this summer in the U.S. Pacific Northwest and British Columbia—the epicenters of North American softwood production—saw some sawmills curtail production. Meanwhile, mudslides and flooding caused by a record rainfall in November have delayed lumber shipments coming out of the Port of Vancouver. That supply decline is simply outmatched by high demand from builders who are still selling homes faster than they can build them.

As prices started to spike late last year, suppliers and homebuilders responded by increasing their lumber orders. Stinson Dean, CEO of Deacon Lumber, a lumber trading company, tells Fortune those buyers didn’t want to get caught off-guard like last time so they bought ahead “just in case” prices climbed back to the exorbitant levels of spring 2021. Of course, that influx of buyers only put more upward pressure on prices.

“Demand is phenomenal. We have been inundated with job quotes for the last two months, and have booked record amounts of future business. Buyers don’t want to get caught flat-footed and have the market run away from them like happened a year ago,” says Michael Goodman, director of specialty products at Sherwood Lumber.

Where do we go from here? Industry insiders don’t foresee lumber over $1,000 per thousand board feet as the new normal. Inevitably, sawmills will chase profits and increase production. But it’s tough to say when prices will fall again.

“Ultimately the frenzy will subside likely later in the first quarter or early in the second quarter, and we will start to see headwinds like higher interest rates,” Goodman says. Of course, higher interest rates and mortgage rates, which are expected to rise this year, could slow the housing market and building.

But don’t expect cheap lumber anytime soon. Even if lumber prices pull back somewhat, it doesn’t mean we’re headed back to pre-pandemic levels. There is a shortage of around 4 million homes—a dynamic that is likely going to keep builders busy (aka buying more lumber) for years to come.

read more…

fortune.com/2022/01/12/

Inflation up 6.8% | Pound Ridge Real Estate

In November, consumer prices increased by 6.8% from a year ago. It marks the largest year-over-year gain since June 1982. Supply-chain constraints and strong consumer demand related to the pandemic and the reopening of the economy have contributed to recent price increases in some sectors.

The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose by 0.8% in November on a seasonally adjusted basis, following an increase of 0.9% in October. Excluding the volatile food and energy components, the “core” CPI increased by 0.5% in November, after a 0.6% increase in October. In November, the price index for a broad set of energy sources increased by 3.5% in November, after a 4.8% increase in October. Gasoline (all type) rose by 6.1% in November, the same increase as in October. It marks its sixth consecutive monthly increase. The food index rose by 0.7% in November as the index for food at home increased by 0.8%.

Like last month, most component indexes increased in November. The indexes for apparel (+1.3%), shelter (+0.5%), airline fares (+4.7%), used cars and trucks (+2.5%), and new vehicles (+1.1%) showed sizeable monthly increases in November. The index for major appliances rose by 2.4% in November, after a 0.9% decline in October. Meanwhile, the indexes for motor vehicle insurance, recreation, and communication all declined in November.

The indexes for owners’ equivalent rent (OER) and rent of primary residence (RPR) both increased by 0.4% over the month. Monthly increases in OER and RPR have averaged 0.4% over the last three months.

During the past twelve months, on a not seasonally adjusted basis, the CPI rose by 6.8% in November, following a 6.2% increase in October. The “core” CPI increased by 4.9% over the past twelve months, following a 4.6% increase in October. The food index rose by 6.1% and the energy index rose by 33.3% over the past twelve months.

NAHB constructs a “real” rent index to indicate whether inflation in rents is faster or slower than overall inflation. It provides insight into the supply and demand conditions for rental housing. When inflation in rents is rising faster (slower) than overall inflation, the real rent index rises (declines). The real rent index is calculated by dividing the price index for rent by the core CPI (to exclude the volatile food and energy components).

The Real Rent Index decreased by 0.1% in November, after a decrease of 0.2% in October. Over the first eleven months of 2021, the monthly change of the Real Rent Index was -0.2%, on average.

read more…

eyeonhousing.org

States can improve housing well-being through thoughtfully designed policies | Pound Ridge Real Estate

Senior Fellow – Brookings MetroFuture of the Middle Class Initiative


Jenny Schuetz

Rising housing costs have become an increasingly salient political issue for state-level elected officials across the United States. Local governments have traditionally exerted the most direct control over land use and housing production, yet political and fiscal incentives align to pressure local officials into restricting new development, especially of moderately priced homes. However, state governments are increasingly feeling the pinch of poorly functioning housing markets in several ways. Inadequate supply, especially in near job centers and transportation infrastructure, makes it harder for companies to recruit and retain workers. Most new housing is developed on the urban fringe in car-dependent locations, leading to higher traffic volumes and more greenhouse gas emissions. Exclusionary zoning by affluent, high-opportunity communities restricts economic mobility and exacerbates racial and economic segregation. In short, the economic, social, and environmental costs of poorly functioning housing markets spill over beyond local boundaries to affect entire regions and states. State-level action has the potential to improve these outcomes.

In a new study, I examine what state governments can—and should—do to encourage healthy housing markets. I identify four broad goals to guide statewide housing policies, discussed in more detail below. To illustrate the range of existing state policy approaches, I examine the types of policies uses by five contrasting states: California, Massachusetts, Oregon, Utah, and Virginia. To achieve any particular goal, states can use a variety of different policy tools, giving them flexibility to design an approach that fits their economic needs, institutional capacity, and political circumstances.

GOAL #1: ANALYZE STATE HOUSING MARKET CONDITIONS TO DESIGN APPROPRIATE POLICIES

Before adopting or amending housing policies, state leaders should use data to identify key needs and challenges, and design their interventions accordingly. Comparing a handful of simple metrics across the five sampled states illustrates how differences in underlying market conditions can inform policy choices (Figure 1).

Figure 1

Population growth is a primary driver of housing demand: Fast-growing places need to build more housing to accommodate more people. Utah counties experienced by far the highest average population growth (0.16) between 2009 and 2019, three times as high as Massachusetts counties. This implies that the typical Utah locality will need to expand housing supply more than localities in other states, particularly slow-growth states like Massachusetts.

A helpful affordability metric is the ratio of median home values to median household incomes. Value-to-income ratios between 3 and 4 are considered healthy, because they imply that the typical household could buy a home while spending about one-third of their monthly income on housing. Of the studied states, only Utah and Virginia fall in that range. California has (unsurprisingly) the most expensive housing, with median home value-to-income ratios around 7.00—well above any threshold for “affordable.”

The final metric, the share of housing built before 1940, is a proxy for housing quality. Older homes typically have higher maintenance needs, including lower energy efficiency. Massachusetts stands out for having a very large share of older housing.

Although specific policy priorities and strategies will vary across states, based on underlying housing market conditions, most states could benefit from policies to address the next three goals:

  • Encourage housing production in places with strong demand
  • Provide financial support to low-income households,
  • Reduce climate risks

GOAL #2: ENCOURAGE HOUSING PRODUCTION IN PLACES WITH STRONG DEMAND

Current debates over how statewide zoning reform start with the assumption that local governments are overly restrictive of housing, needing more state oversight. This raises the question: Are strict zoning and limited housing production prevalent across all (or most) localities within states? One simple diagnostic is to look at the relationship between housing growth and prices or rents: In well-functioning housing markets, places with strong demand will add more housing, while places with weak demand build very little.

Graphing county-level housing values and changes in the number of homes for our sample states shows the expected positive relationship in four states (Figure 2). In Massachusetts, Oregon, Utah, and Virginia, counties that had higher population growth from 2009 to 2019 had higher housing values in 2019. (Counties offer a consistent unit of analysis across states, although cities and towns also play important roles in land use regulation.) California is the one exception: The more rapidly growing counties are among the least expensive. This corresponds with prior research that affluent counties have the most restrictive regulations and generally oppose new development.

Figure 2

States have at least four different strategies to incentivize local governments to allow more development in places with strong demand. These can be designed either to apply to all localities within a state or targeted towards specific places where supply lags demand. Broadly defined, these strategies include:

  • Financial carrots and/or sticks tied to quantitative housing production targets
  • Oversight of local land use planning
  • Create a “builders remedy” that allows developers to override local zoning under certain conditions (for instance, to construct below-market-rate housing),
  • State pre-emption of specific zoning rules

Over the past few years, several states have focused on preemption of narrowly defined rules, especially zoning bans on accessory dwelling units (ADUs) and duplexes. However, the most effective policies will target improved housing outcomes, such as increased production or affordability. Land use regulations are complex and multi-layered, making it easy for localities that don’t want to produce housing to appear compliant on paper while actually not building anything. For example, a city’s zoning might technically allow duplexes, while large setback requirements or low floor-to-area ratios make them financially infeasible or impractical.

GOAL #3: PROVIDE FINANCIAL SUPPORT TO LOW-INCOME HOUSEHOLDS

Even in well-functioning housing markets with abundant housing, the poorest 20% of households in all parts of the U.S. cannot afford even modest market-rate housing without subsidies. This is primarily a reflection of very low wages, and so can be most directly addressed by giving poor households direct financial assistance. Because federal housing subsidies are not an entitlement, only one in four poor renters receive any federal rental subsidy. States have a number of different ways they can support low-income households including:

  • Household-based rental assistance, such as vouchers and homelessness prevention services
  • Supply-side rental assistance, including the federal Low-Income Housing Tax Credit (LIHTC) program
  • Subsidies to help low-income homeowners with maintenance and utility costs,
  • Down-paymentassistance for first-time homeowners

GOAL #4: REDUCE CLIMATE RISKS

Land use regulation and building codes are part of the toolkit available to state governments to reduce the risk and harm of climate change. Ideally, state environmental protection laws should discourage development in risky and/or sensitive locations (e.g. flood- and fire-prone areas) and encourage climate-friendly homes (energy efficient materials, structures, and locations), while not unduly restricting overall housing stock relative to population and job growth. In practice, states often struggle to balance these goals. The clearest example is California’s landmark environmental protection law, CEQA. Adopted in the 1970s with the intent to limit environmentally damaging development, in recent years CEQA has been weaponized by NIMBY homeowners to block projects with broad public benefits, including climate-friendly projects like bike lanes.

CURRENT STATE HOUSING POLICIES START FROM WIDELY VARYING BASELINES

Housing policies in the five studied states vary along several important dimensions. They represent different points along the intensity and complexity of current policies, from highly complex (California) to lightest touch (Utah and Virginia). The states’ legal and institutional structures—the framework within which localities operate—also vary widely. California sets housing production targets for metro areas and localities—although these targets have not been effectively enforced. California and Oregon have explicit statewide mandates to monitor land use planning and/or housing production. Massachusetts has a statewide “fair share” rule focused on low-income housing, which allows developers to override local zoning under certain conditions. All five states offer some types of housing subsidies, but differ in the target populations and activities. Figure 3 summarizes high-level differences in how each state addresses the four policy goals; specific policies and institutional structures are discussed in more detail in the longer report.

Figure 3

GETTING POLICY JUST RIGHT REQUIRES GOOD DATA, CAREFUL PLANNING, AND A WILLINGNESS TO EXPERIMENT

Because states currently start from such different baselines—both in market conditions and institutional capacity—there is not one consistent set of recommendations that will work for all states. California would benefit from simplifying and streamlining its many complex programs and regulations. Virginia and Utah will need to start slowly, assessing current needs and building up staff capacity. With that caveat, three general rules of good policy can benefit all states.

  • Do your homework. Thoughtful data analysis is the foundation of solid policy.
  • Experiment, evaluate, and tweak. It’s hard to get policy “just right” on the first try, especially in such a complex and fast-changing market. Implementing pilot programs that can be evaluated and tweaked before rolling out at scale can help deliver better long-term results.
  • Keep things simple. Complex policies and regulations require more staff time and resources to administer and oversee and impose higher administrative burdens on grant recipients to comply.
  • Think hard about unintended consequences. Policies can have ripple effects that undermine their primary goals—and it’s very difficult to reform or repeal harmful policies (like California’s CEQA and Prop 13) once they become deeply entrenched.

read more…

brookings.edu/research/

Pending home sales drop 8% | Pound Ridge Real Estate

Pending home sales take a surprising dip in September

Housing activity in the U.S. kicked off the fall season slower than anticipated.

Pending home sales, a leading indicator of the health of the housing market, fell in September, reversing an increase a month earlier. The National Association of Realtors’ (NAR) Pending Home Sales Index, which tracks the number of homes that are under contract to be sold, dropped 2.3% in September from August — a surprising dip. Analysts expected a 0.5% increase in sales, according to Bloomberg consensus estimates.

“Contract transactions slowed a bit in September and are showing signs of a calmer home price trend, as the market is running comfortably ahead of pre-pandemic activity,” said Lawrence Yun, NAR’s chief economist. “Some potential buyers have momentarily paused their home search with intentions to resume in 2022.”

Contract signings were down 8% from the same month a year earlier. And pending sales were down in all four regions in the U.S. from August and September 2020. The Northeast region recorded the largest dip in activity, posting a 3.2% from August.

The results show that sales activity may actually slow down into the fall since pending sales precede actual sales. In September, existing home sales rose 7% from a month earlier, the NAR reported last week.

“Although home sales activity has retreated from its earlier highs, it is stabilizing at a level of activity that is above pre-pandemic pace thanks to a combination of eager young buyers, lingering pandemic savings, and low mortgage rates creating opportunity despite ongoing home price gains,” Danielle Hale, chief economist for Realtor.com, said in a statement prior to the results.

The slowdown in activity could help to put the brakes on home price growth. Yun recently noted that home price growth is moderating from its 20%-plus increases. Median existing-home price for all housing types in September hit $352,800, up 13.3% from a year ago, but slightly down from the previous month and the third straight month of declines, according to the NAR. In August, the S&P CoreLogic Case-Shiller national home price index remained the same from a month earlier. Even so, data from the St. Louis Federal Reserve released Wednesday said the median U.S. home price just passed $400,000 for the first-time ever.

“As rising home prices are paired with rising mortgage rates, which have already jumped above 3%, we could see mortgage payments that require larger shares of buyer paychecks, especially if incomes grow more slowly,” said Hale. “This could cause some buyers to opt out, dampening demand and ultimately causing sales activity and home price growth to slow.”

read more…

finance.yahoo.com/news/

Existing sales up 23.7% | Pound Ridge Real Estate

NAR released a summary of existing-home sales data showing that housing market activity this January rose modestly 0.6% from December 2020. January’s existing home sales reached a 6.69 million seasonally adjusted annual rate. January’s sales of existing homes rose 23.7% from January 2020.

Line graph: U.S. Existing-Home Sales, January 2020 to January 2021

The national median existing-home price for all housing types rose to $309,900 in January, up 14.1% percent from a year ago. Home prices have continued to escalate, and this marks the 107th consecutive month of year-over-year gains.

Bar chart: U.S. and Regional Median Sales Price of Existing-Home Sales, January 2021 and January 2020

Regionally, all four regions showed double digit price growth from a year ago. The West had the largest gain of 16.1% followed by the Northeast with an increase of 15.8%. The Midwest showed an increase of 14.7% and the South had the smallest price gain of 14.6% from January 2020.

January’s inventory figures dropped 1.9% from last month standing at 1.04 million homes for sale. Compared with January of 2020, inventory levels dropped 25.7%. This would mark 20 straight months of year over year declines. It will take 1.9 months to move the current level of inventory at the current sales pace.

It takes approximately 21 days for a home to go from listing to a contract in the current housing market. A year ago, it took 43 days.

Bar chart: Inventory, January 2020 to January 2021

From December 2020, two of the four regions had increases in sales. The South had the largest gain of 3.2% followed by the Midwest with an increase of 1.9%. The Northeast had a decline of 2.2% followed by the West with the biggest dip of 4.4%.

From a year ago, all four regions showed double digit increases in sales. The South region had the largest gain of 25.1%. The Northeast had an increase in sales of 24.3% followed by the Midwest with a rise of 22.7%. The West had the smallest gain of 21.3%.

The South led all regions in percentage of national sales, accounting for 43.9% of the total, while the Northeast had the smallest share at 13.0%.

Bar chart: Regional Existing Home Sales and Year-Over-Year Percent Change, January 2021 and January 2020

In January, single-family sales were up 0.2% and condominiums sales were up 4.1% compared to last month. Single-family home sales were up 23.0% while condominium sales were up 28.8% compared to a year ago. The median sales price of single-family homes rose 14.8% at $308,300 from January 2020, while the median sales price of condominiums rose 8.6% at $269,600.

Line graph: Single Family vs Condo Sales Month-Over-Month Percent Change, January 2019 to January 2021
Line graph: Single Family vs Condo Price Year-Over-Year Percent Change, January 2019 to January 2021

Michael Hyman

read more…

nar.realtor/blogs/

NAHB builder index hits all time high | Pound Ridge Real Estate

The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. It is a diffusion index, which means that a reading above 50 indicates a favorable outlook on home sales; below 50 indicates a negative outlook.

The latest reading of 90 is up 5 from last month’s 85 and at its highest level in the indicator’s history, exceeding its December 1998 record.

In another sign that housing continues to lead the economy forward, builder confidence in the market for newly-built single-family homes increased five points to 90 in November, shattering the previous all-time of 85 recorded in October, according to the latest NAHB/Wells Fargo Housing Market Index (HMI) released today. Builder confidence levels have hit successive all-time highs over the past three months.

Here is the historical series, which dates from 1985.

Housing Market Index

The HMI correlates fairly closely with broad measures of consumer confidence. Here is a pair of overlays with the Michigan Consumer Sentiment Index (through the previous month) and the Conference Board’s Consumer Confidence Index (through the current month).

HMI and Consumer Sentiment
HMI and Consumer Confidence
https://758fb15e76626165e7ab297648959659.safeframe.googlesyndication.com/safeframe/1-0-37/html/container.html

Mortgage rates average 2.81% | Pound Ridge Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage (FRM) averaged 2.81 percent, the lowest rate in our survey’s history which dates back to 1971.

“Low mortgage rates have become a regular occurrence in the current environment,” said Sam Khater, Freddie Mac’s Chief Economist. “As we hit yet another record low, the tenth record this year, many people are benefitting as refinance activity remains strong. However, it’s important to remember that not all people are able to take advantage of low rates given the effects of the pandemic.”

News Facts

  • 30-year fixed-rate mortgage averaged 2.81 percent with an average 0.6 point for the week ending October 15, 2020, down from last week when it averaged 2.87 percent. A year ago at this time, the 30-year FRM averaged 3.69 percent.
  • 15-year fixed-rate mortgage averaged 2.35 percent with an average 0.5 point, down from last week when it averaged 2.37 percent. A year ago at this time, the 15-year FRM averaged 3.15 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.90 percent with an average 0.2 point, slightly down from last week when it averaged 2.89 percent. A year ago at this time, the 5-year ARM averaged 3.35 percent.

The PMMS® is focused on conventional, conforming, fully-amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit. Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

NYC apartments for rent sky rocket | Pound Ridge Real Estate

  • The number of empty rental apartments in Manhattan nearly tripled compared with last year, according to a report from Douglas Elliman and Miller Samuel.
  • The inventory of empty units, which rose to 15,000 in August, is the largest ever recorded since data started being collected 14 years ago, the report said. 
  • Hopes for a rebound in the fall or the end of 2020 look increasingly unlikely.
A man enters a building with rental apartments available on August 19, 2020 in New York City.

A man enters a building with rental apartments available on August 19, 2020 in New York City.

The number of empty rental apartments in Manhattan nearly tripled compared with last year, as more New Yorkers fled the city and prices declined.

There were more than 15,000 empty rental apartments in Manhattan in August, up from 5,600 a year ago, according to a report from Douglas Elliman and Miller Samuel. The inventory of empty units is the largest ever recorded since data started being collected 14 years ago, the report said. 

Analysts say the rental market is the best barometer of overall strength in Manhattan’s real estate market, since rentals account for 75% of apartments and that market reacts more quickly to demand changing than the sales market.

Experts say the migration from the city to the suburbs during the Covid-19 crisis has been fueled in large part by Manhattan renters leaving the city.

“The rental market is weak and getting weaker,” said Jonathan Miller, CEO of Miller Samuel. “The first-time buyers in outlying areas are largely coming from the Manhattan rental market.”

Hopes for a rebound in the fall or the end of 2020 look increasingly unlikely. Although rental prices have come down — median rental prices fell 4% in August — the discounts are not steep enough yet to lure new renters back to the city. The average rental price for a two-bedroom in Manhattan is still $4,756 a month.

The fall is generally a slow period in the Manhattan rental market, especially before an election, Miller said.

Landlords are offering ever-larger incentives to try to entice renters, with the largest share of landlords offering concessions in history. On average, landlords were offering 1.9 months of free rent to new renters in August. The weakest segment of the rental market is the lower end, for one bedrooms and studios, partly a result of the pandemic’s greater impact on lower earners.

Average rental prices for studios fell 9%, to $2,574, while the average for one-bedroom apartments fell 5% to $3,445. 

The big question for the Manhattan economy and beyond is how far will the economic ripples from the weak rental market spread. While big landlords like REITs and real estate companies (see a great option here) have access to capital, smaller mom and pop landlords with just one or two buildings may have trouble paying their mortgages and property taxes, which could later hit banks and lenders, as well as New York’s tax revenue.

“Where you are already seeing stress on landlords is on the low end of the price spectrum,” Miller said. “You’re clearly seeing weakness in the smaller end of the rental market.”

read more…

https://www.cnbc.com/2020/09/10/manhattan-rental-

Mortgage rates fall to historic low of 2.86% | Pound Ridge Real Estate

Mortgage Rates Hit Another All-Time Low

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage (FRM) averaged 2.86 percent, the lowest rate in our survey’s history which dates back to 1971.

“Mortgage rates have hit another record low due to a late summer slowdown in the economic recovery,” said Sam Khater, Freddie Mac’s Chief Economist. “These low rates have ignited robust purchase demand activity, which is up twenty-five percent from a year ago and has been growing at double digit rates for four consecutive months. However, heading into the fall it will be difficult to sustain the growth momentum in purchases because the lack of supply is already exhibiting a constraint on sales activity.”

30-year fixed-rate mortgage averaged 2.86 percent with an average 0.8 point for the week ending September 10, 2020, down from last week when it averaged 2.93 percent. A year ago at this time, the 30-year FRM averaged 3.56 percent.  

15-year fixed-rate mortgage averaged 2.37 percent with an average 0.7 point, down from last week when it averaged 2.42 percent. A year ago at this time, the 15-year FRM averaged 3.09 percent.  

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.11 percent with an average 0.2 point, up from last week when it averaged 2.93 percent.  A year ago at this time, the 5-year ARM averaged 3.36 percent.

The PMMS® is focused on conventional, conforming, fully-amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit. Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

Case Shiller home prices up 4.3% | Pound Ridge Real Estate

S&P CoreLogic Case-Shiller Index Reports 4.3% Annual Home Price Gain In June

S&P Dow Jones Indices today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for June 2020 show that home prices continue to increase at a modest rate across the U.S. More than 27 years of history are available for these data series, and can be accessed in full by going to www.spdji.com.

Please note that transaction records for March, April, May and June 2020 for Wayne County, MI are unavailable due to delays at the local recording office caused by the COVID-19 lockdown. Since Wayne is the most populous county in the Detroit metro area, S&P Dow Jones Indices and CoreLogic are unable to generate a valid March, April, May and June 2020 update of the Detroit S&P CoreLogic Case-Shiller indices for the August release.

When the sale transaction data flow resumes for Wayne County, S&P Dow Jones Indices and CoreLogic will provide estimated Detroit index values for months with missing updates.

YEAR-OVER-YEAR

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 4.3% annual gain in June, no change from the previous month. The 10-City Composite annual increase came in at 2.8%, down from 3.0% in the previous month. The 20-City Composite posted a 3.5% year-over-year gain, down from 3.6% in the previous month.

Phoenix, Seattle and Tampa continued to report the highest year-over-year gains among the 19 cities (excluding Detroit) in June. Phoenix led the way with a 9.0% year-over-year price increase, followed by Seattle with a 6.5% increase and Tampa with a 5.9% increase. Five of the 19 cities reported higher price increases in the year ending June 2020 versus the year ending May 2020.

The charts on the following page compare year-over-year returns of different housing price ranges (tiers) for Phoenix and Seattle.

MONTH-OVER-MONTH

The National Index posted a 0.6% month-over-month increase, while the 10-City and 20-City Composites posted increases of 0.1% and 0.2% respectively before seasonal adjustment in June. After seasonal adjustment, the National Index posted a month-over-month increase of 0.2%, while the 10-City Composite posted a decrease of 0.1% and the 20-City Composite did not post any gains. In June, 16 of 19 cities (excluding Detroit) reported increases before seasonal adjustment, while 12 of the 19 cities reported increases after seasonal adjustment.

ANALYSIS

“Housing prices were stable in June,” says Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P Dow Jones Indices. “The National Composite Index rose by 4.3% in June 2020, as it had also done in May (June’s growth was slightly lower in the 10- and 20-City Composites, which were up 2.8% and 3.5%, respectively). More data will be required to understand whether the market resumes its previous path of accelerating prices, continues to decelerate, or remains stable. That said, it’s important to bear in mind that deceleration is quite different from an environment in which prices actually fall.

“June’s gains were quite broad-based. Prices increased in all 19 cities for which we have data, accelerating in five of them. Phoenix retains the top spot for the 13th consecutive month, with a gain of 9.0% for June. Home prices in Seattle rose by 6.5%, followed by Tampa at 5.9% and Charlotte at 5.7%. As has been the case for the last several months, prices were particularly strong in the Southeast and West, and comparatively weak in the Midwest and (especially) Northeast.

read more…

https://www.spglobal.com/spdji/en/