FNC’s latest Residential Price Index (RPI) for April indicates that U.S. residential property values are up for the second month in a row — evidence that home prices are strengthening as rising demand and limited inventory continue to characterize many U.S. markets. Nationwide, April home prices — based on recorded sales transactions in the 100 largest metropolitan areas — rose 0.6 percent from the previous month. Another likely contributor to this price gain is the continued decline in the number of distressed properties in total home sales. FNC’s RPI is the industry’s first hedonic price index built on a comprehensive database that blends public records with real-time appraisals of property characteristics and neighborhood attributes.
Based on the latest data on non-distressed home sales (existing and new homes) through April, FNC’s national RPI shows that single-family home prices rose in April at a seasonally unadjusted rate of 0.6 percent. As a gauge of underlying home value, the RPI excludes sales of foreclosed homes, which are frequently sold with large price discounts reflecting poor property conditions.
All three RPI composites (the national, 30-MSA, and 10-MSA indices) rose in April, but the two narrower indices indicate that home prices rose faster in the nation’s largest housing markets. The indices’ year-over-year trends continue to show decelerations in the pace of price declines when compared to the same month a year ago. April’s negative 2.4 percent year-over-year marks the slowest pace of price declines since the housing crash.
The majority of the markets tracked by the FNC 30-MSA composite index show a month-to-month increase in April. Three Florida markets (Miami, Orlando and Tampa), St. Louis and Washington, D.C., are the only metro cities where home prices fell during the month. Nearly a dozen cities, including Chicago, Las Vegas and Los Angeles, experienced moderate price gains, up more than 2 percent from March; Detroit, Nashville and Portland show the largest uptick.
Miami and Tampa’s April downtrend came after home prices rose five consecutive months (November to March). The small setback is likely due to a modest increase in the share of foreclosure sales during the month, which drives down prices on sales of non-distressed properties. Meanwhile, signs of a spring sale season appear to be absent in Orlando, St. Louis and Washington, D.C., if judged on the basis of month-over-month price momentum. Home prices declined in each consecutive month since January, averaging 0.9 percent (Orlando), 1.4 percent (St. Louis), and 2 percent (D.C.) per month.
These three cities currently rank worst among the nation’s major housing markets in terms of year-over-year price depreciation. In contrast, markets such as San Antonio, Nashville, Detroit, Dallas and Boston are experiencing modest year-over-year price appreciations.
Peak to date, about half of the component markets in the FNC 30-MSA composite index continue to show 30 percent or more declines in property values; in eight, homeowners have lost almost 50 percent or more of the peak market value. Leading the declines are Las Vegas (61.8 percent), Orlando (58.6 percent), Phoenix and Riverside (58.1 percent), Sacramento (56.6 percent) and Miami (54.4 percent). The peak-to-date price change is positive for two of the largest Texas cities, Houston and San Antonio — a stark contrast to the rest of markets. In the last six months, home prices in Houston and San Antonio have averaged about 3 percent and 4 percent above the July 2006 market peak.