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S e c on da r y M a r k e t a na ly t ic s se r v ic i ng or ig i nat ion ANALYTICS Continued from Page 51 sales to grow 8.5 percent, with new home sales expanding 20 percent. Furthermore, even with 30-year mortgage rates hiking up nearly a full percentage point over the past few months, Fitch insists "affordability in total is still attractive." "While borrowing rates may somewhat decrease the customer base, we believe stronger demand will be evident in trade-up housing where that buyer is better positioned financially to absorb higher home prices and increased interest rates," the company said. At the point, Fitch says housing growth is being stymied most by declining affordability, widespread negative equity, and tight mortgage qualification standards, all of which are putting a drag on demand. Also an issue is the shortage of developed lots for construction, which—coupled with rising material and labor costs—has put pressure on builders. However, the company believes those problems are subject to specific markets and are not prominent nationally. August Housing Metrics Indicate Slowing Recovery Has the recovery reached a point of diminishing returns? A n analysis of countylevel data across the country shows the housing market may have hit a plateau in August. DataQuick's monthly Property Intelligence Report (PIR), which examines home price and sales metrics as well as foreclosure data across 42 counties, is the latest in a line of reports pointing to mounting evidence that the housing recovery is losing some of its energy. According to the company's data, home prices in August grew in 40 of the 42 counties on a monthly basis and in all counties on a quarterly and yearly basis. However, though growth was positive, the rate of improvement "decreased from the elevated growth rates that were experienced in the prior month and quarter," said Gordon Crawford, Ph.D., VP of analytics for DataQuick. While price increases over the last year have been rapid, Crawford says context is key. "[A]lthough the experience differs across markets, most markets still have home prices that are well below peak home price levels. This is significant as it means that many households remain with negative equity, September Sees Expected Declines in Sales, Prices With summer now a memory, the housing market heads back into its seasonal slumber. T he frenzy that has characterized the 2013 housing market has officially come to a close, Redfin says in its latest Real-Time Price Tracker. The tech-powered brokerage reported a seasonal decline in home sales, prices, and inventory in September, though the recovery's strength is still evident in year-over-year gains. According to Redfin, home sales totaled 73,781 across the company's 19 tracked markets, a decline of 18.8 percent from August—"in step with normal seasonal trends," said analyst Tommy Unger. Compared 52 | The M Report to September 2012, though, sales were up 8.1 percent. Based on current pending sales data, Redfin anticipates another 6 percent monthly decline in October compared to the 8 percent gain recorded last year. Home prices experienced their third straight month-over-drop drop, falling 2.2 percent from August but still coming up 15.9 percent ahead of last year. The median sales price across all markets was $330,470. Eleven of the cities covered posted weaker prices compared to August, just more than 10 cities in the same period last year. "Colder climates, as usual, showed larger seasonal declines in prices," Unger said. "For example, Philadelphia, Chicago, and Long Island posted 8.2 percent, 6.1 percent, and 5.7 percent month-overmonth declines while Riverside, California; San Diego, and Austin kept things hot a bit longer with 2.4 percent, 1.5 percent, and 1 percent month-over-month increases." Finally, low inventory continues to be "the thorn in the market's limiting the supply of available properties for sale," he said. On the other hand, sales growth spread to more areas of the country in August, with 29 of the 42 markets posting increases over July. Forty of the tracked counties reported improvements in sales numbers over the quarter, and 30 experienced gains year-over-year. Meanwhile, foreclosure numbers picked back up in many counties that had been experiencing decreases over previous months. According to DataQuick's property records, foreclosures decreased month-over-month in 20 counties compared to 31 in July. For the quarter ending in August, 23 counties reported a decline in foreclosures (compared to 26 in July), while 25 saw year-over-year declines (28 in July). side," as Unger describes it. The total number of homes for sale in Redfin's markets in September was 234,670, a decrease of 3.4 percent month-over-month and 17.5 percent year-over-year. "Homes continue to sell quickly, but they are not being replaced by new listings," Unger said. "There are two big reasons why people are not listing their homes: they are underwater on their current mortgage, or their mortgage interest rate is so low that a new loan would be much more expensive. "Not surprisingly, we do not expect the inventory situation to improve as the holidays approach," he finished. "Homes continue to sell quickly, but they are not being replaced by new listings." — Tommy Unger, Redfin