Taking the Bait

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Th e M Rep o RT | 57 O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t ANALYTICS Department LocaL eDition The results of the sur- vey show that 42 percent of Americans believe now is a good time to sell a home. This is the third straight month that the percentage of respondents saying it's a good time to sell has increased, bringing that percent- age to an all-time survey high. Fannie is taking it as a good sign that buying activity will increase in the coming months, as potential buyers may look to shed their homes in order to buy new ones. Half the respondents to Fannie's survey believe home prices will increase in the next 12 months, while 52 percent said they expect mortgage rates to go up in the same time period. In related findings, respondents were generally split regarding their ability to get a mortgage. About 45 percent say they would expect no trouble in getting one, while 52 percent expect it would be difficult to do. A little more than a third of respondents feel the economy is on the right track, despite their optimism for the housing market lately. The encouraging thing, however, is that fewer people are concerned about losing their jobs, which, according to Fannie, may encourage potential homebuyers to enter the market. Also, nearly 90 percent said their household incomes have remained stable or improved over the past year—though an increased share also said their expenses have ticked up. "Concern about job loss among employed consumers has hit a record survey low," said Doug Duncan, senior VP and chief economist at Fannie Mae. Duncan also said that consumer attitudes are at the most favor- able level Fannie has seen in the survey's four-year history and that "consumer confidence is moving in a positive direction." Fannie's April report largely mirrors the results of an April Gallup Poll, which showed that more than half of Americans surveyed feel confident about the housing market. According to that survey, American at- titudes toward buying, selling, and home values are up to their highest levels since 2007. "These more positive views of the housing market may help foster a situation in which homebuying activity increases and home values continue to rise over the next year," the Gallup report stated. Almost exactly what Fannie found. Price gains keep slowing; expected to Halve by 2014 The pick-up in home values may slow down in The second half of The year. California // Despite a lack- luster spring that went against analysts' projections, CoreLogic reports in its latest Home Price Index (HPI) that home prices, including distressed and non-distressed sales, still rose from February to March by 1.4 percent. Without distressed sales, the HPI still reflected positive gains for the month, up 0.9 percent month-over-month. Yearly, home prices rose by 11.1 percent from March 2013 to March 2014. Excluding distressed sales, the yearly gain is slightly less at 9.5 percent. March's gain continues a 25-month consecutive streak of year-over-year home price gains. "March data on new and existing-home sales was weaker than expected and is a cause for concern as we enter the spring buying season. Interest rate-dis- enfranchised potential sellers are adding to the existing shadow inventory, while buyers who can't find what they want to buy are on the sidelines creating a new kind of 'shadow demand,'" said Dr. Mark Fleming, chief economist at CoreLogic. "This supply and demand imbalance continues to drive home prices higher, even though transaction volumes are lower than expected," Fleming said. Moving forward, CoreLogic's HPI suggests that home prices will continue to rise, grow- ing 6.7 percent by March 2015. CoreLogic's analysis of March also projects that home prices will continue to grow monthly, increasing 0.8 percent in April (including distressed sales). Taking out distressed sales, the company projects a 0.6 percent growth from March to April. Despite gains across the board in home prices, CoreLogic tempered the good news with a more holistic assessment of prices pre- and post-crisis. The company found that home prices remain 16 percent below peaks in April 2006. "Home prices continue to rise across the nation, but the affordability, tight credit, and supply concerns are becoming an increasing drag on purchase market activity. In many mar- kets—especially major metro areas like Los Angeles, Atlanta, and New York—home prices are being driven up at double-digit rates fueled by a lack of inventory and record levels of cash purchases," said Anand Nallathambi, presi- dent and CEO of CoreLogic. Excluding distressed sales, all 50 states and the District of Columbia showed year-over-year home price appreciation in March. Twenty-three states and the District of Columbia are at or within 10 percent of their price peak. Including distressed sales, the five states with the largest year-over-year price appreciation include California (17.2 percent), Nevada (15.5 percent), Georgia (12.4 percent), Hawaii (12.3 per- cent), and Oregon (12.2 percent). Including distressed sales, the states furthest from their price peaks include Nevada (-39.9 percent), Florida (-36.3 percent), Arizona (-30.3 percent), Rhode Island (-28.1 percent), and Illinois (-26.5 percent). ANALYTICS March's gain continues a 25-month consecutive streak of year-over-year home price gains.

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