US Home Prices Jump in April, Setting Record

U.S. home prices took a major leap in April, setting a monthly record for gains.

From March to April, home prices gained 2.6 percent and 2.5 percent for the top 10 and top 20 markets respectively, according to the latest S&P/Case-Shiller Home Price Indices. Average prices rose 11.6 percent and 12.1 percent in April from a year ago.

"The recovery is definitely broad based," said David Blitzer of S&P Dow Jones in the report. "The two composites showed the largest year-over-year gains in seven years."

Atlanta, Las Vegas, Phoenix and San Francisco posted year-over-year gains of more than 20 percent in April, with San Francisco leading the way at 23.9 percent. Phoenix posted 12 consecutive months of double-digit growth, as investors there continue to compete for what few distressed properties are for sale. Inventories did rise in Phoenix in May slightly, but demand is still outstripping supply, and pushing prices higher.




Concerns about rising mortgage rates, which spiked in to the mid-4 percent range in just the past week, have dampened expectations for home price gains this summer. Analysts also worry that prices are rising too fast, far faster than income growth, and will soon price too many potential buyers out of the housing market.

"Today's Case-Shiller numbers may reflect where the housing market has been in some of the frothier metros, but they are not indicative of where it's headed," said Zillow's chief economist, Stan Humphries. "The housing market worm has turned over the past few weeks—inventory levels are beginning to show signs of easing, and mortgage interest rates are creeping up. Going forward, both of these factors will help mitigate extreme price spikes caused by very strong housing demand and very low housing supply."

This latest report only tracks prices on a three-month moving average through the end of April, well before mortgage rates began their climb. Still, Blitzer contends that rising rates will not slow price gains.rates in the past, often by shifting from fixed rate to adjustable rate loans. In the housing boom, bust and recovery, banks' credit quality standards were more important than the level of mortgage rates.The most recent Fed Senior Loan Officer Opinion Survey shows that some banks are easing credit restrictions. Given this, the recovery should continue," he said.

As of the end of April, average home prices across the nation were back to levels of early 2004. Prices are still down between 26 and 27 percent from their peaks in the summer of 2006.

Boom Is Back: US Home Prices Jump Most in Seven Years

U.S. single-family home prices rose in March, racking up their best annual gain in nearly seven years as the housing recovery continues to provide a source of strength for the economy, a closely watched survey showed on Tuesday.

The S&P/Case-Shiller composite index of 20 metropolitan areas gained 1.1 percent in March on a seasonally adjusted basis, topping economists' forecasts for 1 percent.

Prices in the 20 cities jumped 10.9 percent year over year, beating expectations for 10.2 percent and the biggest increase since April 2006.

All 20 cities covered by the index saw yearly gains for the third month in a row. Average prices in March were back at their late-2003 levels.

For the first quarter of this year, the seasonally adjusted national index rose 3.9 percent, stronger than the 2.4 percent gain that was seen in the final quarter of last year.

S&P/Case-Shiller Home Price Indices show strong gains for February 2013

Data through February 2013, released today by S&P Dow Jones Indices for its
S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, showed average home prices increased 8.6% and 9.3% for the 10- and 20-City Composites in the 12 months ending in February 2013. The 10- and 20-City Composites rose 0.4% and 0.3% from January to February.

All 20 cities covered by the indices posted year-over-year increases for at least two consecutive months. In 16 of the 20 cities annual growth rates rose from the last month; Detroit, Miami, Minneapolis and Phoenix saw slight annual deceleration ranging from -0.1 to -0.4 percentage points. Phoenix continued to stand out with an impressive year-over-year return of +23.0% while Atlanta and Dallas had the highest annual growth rates in the history of these indices since 1992 and 2001, respectively.

“Home prices continue to show solid increases across all 20 cities,” says David M. Blitzer, Chairman of the
Index Committee at S&P Dow Jones Indices. “The 10- and 20-City Composites recorded their highest annual growth rates since May 2006; seasonally adjusted monthly data show all 20 cities saw higher prices for two months in a row – the last time that happened was in early 2005.

“Phoenix, San Francisco, Las Vegas and Atlanta were the four cities with the highest year-over-year price
increases. Atlanta recovered from a wave of foreclosures in 2012 while the other three were among the hardest hit in the housing collapse. At the other end of the rankings, three older cities – New York, Boston and Chicago – saw the smallest year-over-year price improvements.

“Despite some recent mixed economic reports for March, housing continues to be one of the brighter spots in the economy. The 2013 first quarter GDP report shows that residential investment accelerated from the 2012 fourth quarter and made a positive contribution to growth. One open question is the mix of single family and apartments; housing starts data show a larger than usual share is apartments.”

2012 Builders Top 100 Ranking - West Region

Region: West
Type of home: All types
Status: Public and Private
What they build: All for sale products
Note: (p) indicates a public company.
N/A indicates information not available
* Declined to share revenue numbers
† Home building revenue only
‡ Estimated revenue
				(in millions)
2012 Rank	2011 Rank	Company	Total Closings	Total Revenue
1	1	D.R. Horton (p)	19,954	$4,722
2	2	PulteGroup (p)	16,505	$4,820
3	3	Lennar Corp. (p)	13,802	$4,105
5	5	KB Home (p)	6,282	$1,560
6	7	Hovnanian Enterprises (p)	5,356	$1,806
7	8	The Ryland Group (p)	4,809	$1,308
8	9	Beazer Homes USA (p)	4,428	$1,006
9	10	Meritage Homes Corp. (p)	4,238	$1,194
10	6	Habitat for Humanity International	3,766	$1,500
11	11	M.D.C. Holdings (p)	3,740	$1,203
12	13	Standard Pacific Corp. (p)	3,329	$1,275
13	12	Toll Brothers (p)	3,286	$1,883
14	14	Taylor Morrison	2,933	$1,400
18	18	Weyerhaeuser Real Estate Co. (p)	2,314	$1,070
19	21	Shea Homes	1,921	$814
26	29	Woodside Homes	1,300	$329
33	39	William Lyon Homes	950	$373
40	42	Polygon Northwest Co.	832	$232
42	40	Hayden Homes	785	N/A
49	46	NeighborWorks America	608	N/A
50	106	Saint Aubyn Homes	605	$147
53	80	CBH Homes	548	$85
55	74	Brookfield Residential Properties (p)	533	$1,340
56	54	Corky McMillin Cos.	529	$122
56	47	Discovery Builders/A.D. Seeno Construction	529	$269
67	N/A	Harmony Homes	466	$106
98	N/A	Edge Homes	335	$70

Housing starts at highest level since 2008

Groundbreaking to build homes rose in February and new permits for construction climbed to the highest level since 2008, a sign the nation's housing market recovery is gathering steam.

The Commerce Department said on Tuesday that starts at building sites for homes rose 0.8 percent last month to a 917,000-unit annual rate. That was in line with analysts' expectations of a 915,000-unit rate.

Starts for single-family units, which comprised about two thirds of the total, edged up 0.5 percent to their highest level since June 2008.

Permits for future home construction rose to a 946,000-unit rate, also the quickest since June 2008.

The housing market has regained some footing after a historic collapse that helped push the economy into a deep recession.

Home building added to national economic growth last year for the first time since 2005 and Tuesday's data reinforces the view that it will provide stronger support this year. That could help counter the drag expected from tighter fiscal policy as Washington works to shrink the federal budget deficit.

"Home building continues to recover and add to the recovery," said Gus Faucher, an economist at PNC Financial Services in Pittsburgh. "The rise in permits suggest we will have a solid spring."

The housing data was just the latest to suggest the economy has built a fair bit of momentum in the first quarter. Nevertheless, the Federal Reserve at a meeting on Tuesday and Wednesday is expected to push forward with plans to buy $85 billion in bonds per month until its sees a substantial improvement in the labor market outlook.

Data for U.S. housing starts can be volatile and is sometimes subject to large revisions. The government revised upward its estimate for January housing starts to a 910,000-unit rate.

The housing market remains a shadow of its former self, with starts at less than half of their pre-recession peak and near levels seen in the early 1990s.

The recovery also has been bumpy. In March, homebuilder sentiment slipped to the lowest level in five months as supply chain concerns and rising costs dented enthusiasm, according to data released on Monday.

Stock index futures were little changed following the data amid caution ahead of a crucial vote in Cyprus that could lead the country into default. Investors are waiting to see if the nation's troubles would have a wider impact in the euro zone.

Inventory of existing homes at 13-year low

U.S. home resales edged higher in January and left the supply of homes at its lowest level in 13 years, a sign that steam is gathering in the U.S. housing market.

The National Association of Realtors said on Thursday that existing-home sales rose 0.4 percent last month to a seasonally adjusted annual rate of 4.92 million units.

That was the second highest rate of sales since November 2009, when a federal tax credit for home buyers was due to expire.

Analysts polled by Reuters had forecast a 4.9 million-unit rate.

The U.S. housing market tanked on the eve of the 2007-09 recession and has yet to fully recover, but steady job creation helped the housing sector last year, when it added to economic growth for the first time since 2005.

The nation's inventory of existing homes for sale, which is not seasonally adjusted, fell 4.9 percent from December to 1.74 million, the lowest level since December 1999.

Many Americans are holding back from putting their homes on the market because they owe more on their mortgages than their homes are worth. A sharp drop in inventories over the last year has given developers more incentive to build homes. Home building is expected to boost the economy more in 2013 than it did last year.

Inventories were down 25.3 percent from January 2012.

At the current pace of sales, inventories would be exhausted in 4.2 months, the lowest rate since April 2005.

The low inventories are also helping pushing prices higher.

Nationwide, the median price for a home resale was $173,600 in January, up 12.3 percent from a year earlier.

Home Builders Won't Drop Prices

A report this week from Barclay's downgrading the stocks of several of the nation's largest public home builders drew quick contest from the National Association of Home Builders, but not for the main premise. The Barclay's report centered largely on, "stretched" stock valuations, but it also cited a secondary concern about new home prices.

"New home prices have dramatically outpaced existing home prices, and the reason for that is because you have a very constructed mortgage market today. The only people who can buy are people who are very well off, so that's created a positive mix shift," noted Barclay's analyst Stephen Kim in an interview on CNBC's "Street Signs."

"But if everybody's hopes and dreams about housing come true, which is what's driving the valuations on the stocks, guess what's going to happen? You're going to get a lower mix of buyers into the market which is going to bring new home prices down even as existing home prices are going up."

Right now the divide between new and existing home prices is wider than ever. The average price of an existing home in December was $231,400, according to the National Association of Realtor's, while the U.S. Commerce Department reported the average price of a newly built home stood at 304,000.

In their most recent quarterly statements, all of the largest public home builders reported large annual jumps in the average prices of their homes sold. Pulte's prices jumped 6 percent to $287000, for Lennar it was a seven percent surge to 261,000 and Meritage led the group with a 17 percent annual jump in average sale prices to $323,000.

"New home prices are advancing faster than existing home prices because demand has increased and, as Kim did admit, the mortgage filter is allowing only higher income or at least higher net worth people through the application net, and they are purchasing higher valued homes. But that is true of existing purchases as well," argues David Crowe, chief economist for the NAHB.

Crowe also makes the argument that new home prices are dictated by costs and demand. Both, he says are rising.

"Lumber and other building material prices have risen very rapidly recently. Shortages of lots and labor supply are beginning to show up, and I expect as new household formations begin to recover, that shortage will expand to more markets. The way to get more resources back into the housing market is to raise the price paid, i.e., wages and land prices," says Crowe.

Builder profits, he notes, among the small private builders (who still control 70 percent of the market), have been negligible for several years.

"They will have to raise prices to compensate for their efforts, risks and, at least for a short time, being the only ones left," adds Crowe

Courtesy of CNBC's Diana Olick