Asking home prices rose at their slowest rate in 13 months, rising just 8 per cent year-over-year, or 7.2 per cent excluding foreclosures, according to Trulia Thursday.
Although this year-over-year increase is slower than in previous months, an 8 per cent increase is still far above the long-term historical norm for home-price appreciation, the agency said. Furthermore, prices continue to climb in the most recent quarter: the 2.4 per cent quarter-over-quarter increase in May 2014 is equivalent to 9.9 per cent on an annualized basis. Finally, price gains continue to be widespread, with 93 of the 100 largest metros clocking quarter-over-quarter price increases, seasonally adjusted.
Real Estate, US
Nationally in kthe US, asking home prices are rising slower than in previous months, but the real change has been the price slowdown in the hyper-rebounding markets of the West, said Trulia Thursday.
In May 2014, none of the 100 largest metros had a year-over-year price gain of more than 20 per cent; the steepest increase was 18.8 per cent, in Riverside-San Bernardino. Among the markets with the biggest price gains today, three – Las Vegas, Sacramento, and Oakland – have had significant slowdowns in year-over-year gains, from around 30 per cent in May 2013 to around 15 per cent in May 2014. In contrast, price gains accelerated dramatically in Chicago, up 13.5 per cent year-over-year in May 2014 versus just 3.6 pier cent in May 2013.
Overall, half of the top 10 markets with the largest price gains are outside the West, another big change from last year when almost all of the biggest price increases were in the West.
Rents are up 5.1 per cent year-over-year nationally, with apartment rents up 5.8 per cent and single-family rents up 2.1 per cent.
In November 2013, year-over-year asking prices were up 12.2 per cent. In December, the year-over-year increase slowed slightly to 11.9 per cent. In January 11.4 per cent, in February 10.4 per cent, in March 10 per cent, April 9 per cent and now in May 8 per cent.
This suggests prices are still increasing, but at a slower pace, concludes Trulia.
The Federal Reserve Board of Governors’ Thursday released statistics on the financial accounts of US households. The release shows continued improvement in the financial position of US households with real estate. If fact, the household real estate equity position improved to a level last reached in the second quarter of 2007.
According to NAHB tabulations of the quarterly series, the asset value or market value of owner-occupied real estate held by US households increased by US$758 billion dollars or 3.9 per cent. The liability total – home mortgages – decreased by US$37 billion or 0.4 per cent. The equity position, the difference between assets and liabilities, increased by US$795 billion or nearly 7.9 per cent.
The current ratio of owners’ equity in real estate as a percentage of household real estate is 53.6 per cent. The ratio was last at this level in the first quarter of 2007. The ratio has rebounded rapidly since the first quarter of 2009 when it was at an all-time low of 36.6 per cent.
Elsewhere, total private residential construction spending in the US increased to a seasonally adjusted annual rate of US$378.5 billion according to the Census estimates released this week. The current reading is a slight increase of 0.1 per cent from the revised March estimate and 17.2 per cent higher than one year ago.
Single-family spending increased by 1.3 per cent month-over-month while the home improvement category decreased by 2.2 per cent. Multifamily spending posted another strong month-over-month increase of 2.7 per cent from the revised March estimate.
The figures show significant improvements in residential construction spending for all categories from the prior year. From April 2013, on a 3-month moving average basis, construction spending in single-family increased by 14.6 per cent, multifamily increased by 32.2 per cent, and remodeling increased by 18.5 per cent.