U.S. home prices have been showing strong gains in recent
months, with year-over-year price increases picking up rapidly
since entering positive territory in midsummer, according to data
from the mortgage collateral firm FNC.
The latest FNC index of home sales in 100 major metropolitan
areas showed a 4.2 annual increase in prices of nondistressed homes
compared to Oct. 2011, the company announced today. The rate of
annual price increases in the index has roughly doubled each month
since moving into positive territory in July.
July was the first time since early 2007 that the index showed
home sales prices higher than they were 12 months earlier. On a
month-to-month basis, the index has now risen for eight consecutive
month and prices are 5.1 percent higher than at the beginning of
the year. October home prices in the index were up 0.4 percent
compared to September.
Homeowners feeling more optimistic
The report attributes the increase to generally improving
conditions in the housing market, including a decline in
foreclosures and increasing home sales, as well as rising
expectations among homeowners that are producing higher listing
prices and smaller concessions on those prices.
The FNC price indices exclude data from foreclosure sales.
However, higher foreclosure rates tend to suppress conventional
home prices. According to FNC figures, foreclosures made up 17.6
percent of home sales in October, down from 23.5 percent one year
Home prices are showing unusually strong growth in the Phoenix
market, which was among the hardest-hit in the nation by the
housing crash. Phoenix home prices are up 21.3 percent compared to
their Oct. 2011 levels, by far the strongest annual price gains in
the nation. Other strong gains were seen in Denver, Detroit,
Washington, D.C., and Miami, with annual increases ranging from
13.7 percent to 7.1 percent.
Only two major markets, Columbus, Ohio and Chicago, failed to
show year-over-year and year-to-date price increases.
FNC specializes in real estate collateral technology, data
collection and analysis for the purpose of supporting home
appraisals used in making mortgage loans nationwide.
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