Magazine article Mortgage Banking

Clear Capital Sees First Year-over-Year National Home-Price Gains

Magazine article Mortgage Banking

Clear Capital Sees First Year-over-Year National Home-Price Gains

Article excerpt

For the first time in 37 months, a new home-price report has found evidence that home prices on a national level are recovering. The latest Home Data Index[TM] (HDI) Market Report from Clear Capital, Truckee, California, found national home prices gained 2.3 percent (year-over-year) in the report covering sales activity through January.

The Northwest region was the only one posting a drop in quarterly home prices (-1 percent). The Midwest saw prices up by 5 percent, the South was up 1.5 percent and the West gained 1.3 percent, all on a quarterly basis.

In an interview with Mortgage Banking, Alex Villacorta, senior statistician with Clear Capital, said, "The major free fall in home prices is over." He added that since the start of the decline in home prices in 2006, the fact that we are now seeing the first year-over-year increase in prices nationally "speaks volumes."

Villacorta added that the housing market is not out of the woods just yet. He said it's possible national home prices could go negative again, but it is likely, at least for the near term--this spring into next summer--national home prices will remain positive on a year-over-year basis.

But if the economy remains weak and jobs do not come back, he said, "It's quite possible prices could move in a southern direction." He noted because the overall housing market is relatively strong right now, in the winter of 2010, it is quite possible that national home prices could turn negative one year from now in the winter of 2011. That is because sales activity could appear softer when measured against the relatively strong market conditions prevailing currently (helped by low mortgage rates and tax credits).

He said the quarterly downturn in prices in the Northeast region "is quite modest, and there is no reason to sound the warning bells."

The latest HDI report found that the national real estate--owned (REO) saturation rate declined 0.7 percent in January 2010 compared with where it stood in December 2009. The national REO saturation rate was 24.8 percent.

Some of the major markets with high REO saturation rates were Detroit (47.7 percent); Orlando, Florida (40.8 percent); Dallas-Fort Worth-Arlington, Texas (37. …

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