MReport June 2017

TheMReport — News and strategies for the evolving mortgage marketplace.

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48 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Summer's Not Just for Sellers Analysis shows that buyers pay less on end-of- summer purchases than any other time of year. A s a whole, summer is known as the prime time for sellers—a time when demand is high, and buyers are willing to pay more to secure a house before school starts. But according to a new analysis by Zillow, summer may work in the buyer's favor, too. In fact, buyers who wait until late summer may actually pay less than if they'd bought during other times of the year. According to the analysis, hous - ing inventory is up significantly by the end of summer, causing many sellers to reduce their listing price. Zillow's data shows that 15 percent of listings are reduced in price during the month of August. Historically, Zillow reported, August has more listings than any other month. Last year, Los Angeles saw about 8,000 more homes on the market in August than in April, while Seattle saw a difference of around 5,000. According to Dr. Svenja Gudell, Chief Economist at Zillow, this new data can be encouraging to buyers who are getting frustrated by the fast-moving spring market. Zillow data shows that homes listed in spring sell faster—and for about $1,500 more—than in other times of the year, meaning a more expensive, overwhelming market for most buyers. "In such a competitive housing market, it's easy for buyers to get frustrated when they are putting in multiple offers without success," Gudell said. "Buyers who start their home search in the spring may still be looking months later—but for those who can wait it out, the end of summer will bring more favor - able conditions. Homes that may have been overpriced earlier in the year are more likely to have a price reduction, and those listings passed over in earlier months may look better with a fresh perspective." August aside, the next best months to buy in are July and September, when about 14 percent of listings see a price cut. On a market level, Detroit is the single best place to buy a home in August. Nearly 21 percent of listings see a price cut during that month, compared to just 13 percent of listings in April. Chicago is a close second, with 19.7 percent of listings decreasing in price for the month. Home Prices Continue Upward Washington had the biggest jump in year-over-year price gains, jumping 12.8 percent year-over-year. T he steady increase in home prices continued in March. The latest CoreLogic Home Price Index (HPI) showed home prices up 1.6 percent from February and 7 percent from a year ago. The firm is confident this upward trend will carry over to next year. Through its HPI Forecast, CoreLogic predicted that home prices will increase by almost 5 percent year-over-year by next March. Its prediction for April's increase is a more modest 0.6 percent. "With a forecasted increase of almost 5 percent over the next 12 months, the index is expected to reach the previous peak during the second half of this year," said Frank Nothaft, Chief Economist for CoreLogic. "Prices in more than half the country have already surpassed their previous peaks, and almost 20 percent of metropolitan areas are now at their price peaks." Washington led states in year- over-year price increases, up 12.8 percent compared to last March. Three of its large metros—Seattle, Tacoma, and Bellingham—posted similar numbers. Neighboring Oregon saw a 9.9 percent increase in prices, while Utah saw a 9.4 percent bump. Of states that saw prices increase over the year, Oklahoma had the smallest return, with prices climbing 1.1 percent. Only two states saw home prices drop compared to last year. Prices in Alaska were 0.8 percent below where they were last March; prices in West Virginia were 1.2 percent under last year's values. "A potent mix of strong job gains, household formation, popu - lation growth, and still-attractive mortgage rates in the face of tight inventories are fueling a continuing surge in home prices across the U.S.," said Frank Martell, President and CEO of CoreLogic. "Price gains were broad based with 90 percent of metropolitan areas post - ing year-over-year gains." Outside of Seattle, the largest gains were seen in the Denver metro area, where prices climbed 10 percent over the year. Los Angeles, Las Vegas, and Chicago all showed home price increases of 6.4 percent compared to last March. The once scalding-hot Houston metro showed much quieter gains over the year. The city's home prices increased 3.2 percent from a year ago. The smallest major metro increase occurred in the New York/ Northern New Jersey region, where annual values climbed 2.3 percent. "With a forecasted increase of almost 5 percent over the next 12 months, the index is expected to reach the previous peak during the second half of this year." —Frank Nothaft, Chief Economist, CoreLogic

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