U.S. home prices continued to show upward trends in May, extending April gains for two consecutive months of positive price momentum, according to FNC Inc.
Despite record foreclosure activity and rising unemployment rates in recent months, the single-family housing market continues to show signs of price stabilization in line with rising activities in new housing starts and building permits.
FNC’s residential price index looks at new and resale homes in 100 metro markets. It excludes sales of REOs — homes repossessed by banks via foreclosure — which are often sold with large price discounts.
Home prices rose 0.5% in April, according to FNC's RPI.
The latest gains captured by the RPI occurred despite continued pressure from higher volumes of foreclosure sales and their price discounts, FNC said. In May, the median foreclosure price discount was up nearly 1% from April to 24.4%, and foreclosure sales, including short sales and REOs, accounted for close to 38% of total sales.
All three RPI composites — the national, 30-MSA, and 10-MSA indices — continued to extend the gains from the previous month, with the national composite exhibiting the strongest one-month gain in May. On a year-over-year basis, home prices nationwide are 6.2% below the levels attained a year ago.
Within the 30-MSA composite, home prices rose month-over-month in 18 markets by an average rate of 2.3%. Of the remaining 12 markets, the month-over-month declines were much weaker, averaging 1.3%.
In a sign that conditions are stabilizing, there has been a steady increase in the number of markets exhibiting positive month-over-month price momentum, up from 14 in March to 16 in April and 18 in May.
Minneapolis, Boston, Charlotte, Portland, Chicago and Washington, D.C., show the strongest price momentum with Minneapolis clocking the biggest gain since March, rising month-over-month at a cumulative total of 9.2%.
Orlando and Phoenix lead the nation in home price declines — having lost close to 5% over the last five months, followed by Las Vegas, New York and Miami at about 3%.
Listing activities continue to show a strong uptrend, surging more than 26% from May to June following a robust 6.9% increase in the previous month. And in an indication that the market is becoming more favorable to sellers, the amount of price concessions offered by homeowners is dropping in size, FNC said
The median listing price discount — the percentage difference between the final selling price and the owner’s asking price — is down from 7.5% in 3Q 2010 to 2.2% in 2Q 2011.
Write to Kerry Curry.
Follow her on Twitter @communicatorKLC.
