Housing market reports reveal a mixed bag of results
Home prices, building permits increase as mortgage rates dip
Home prices maintained their upward trajectory, increasing 2% in the third quarter of 2013, making it the 9th consecutive quarterly price increase in the seasonally adjusted, purchase-only index, the Federal Housing Finance Agency House Price Index revealed Tuesday.
This is the first time since 2009 that the national home price level is higher than it was five years ago.
But as home prices continue to grow, the FHFA contract mortgage interest rate slipped 0.04% from September to October and fell to 4.32% after several months of steady gains.
"Overall, the housing market experienced another strong quarter, but price appreciation in the latter part of the quarter was relatively subdued," said FHFA Principal Economist Andrew Leventis.
The FHFA calculates the HPI using home sales price information from mortgages sold or guaranteed by Fannie Mae and Freddie Mac, which grew 8.4% from the third quarter of 2012 to the third quarter of 2013, while the seasonally adjusted monthly index for September increased 0.3% from August.
The September HPI is the 20th consecutive monthly price increase in the purchase-only, seasonally adjusted index, analysts with Econoday said.
"The increase was led by a 1.9% boost in the East-South Central region. Four of nine census regions showed gains in the latest month while three decreased marginally and two were unchanged," Econoday added.
A total of 48 states and the District of Columbia witnessed increases in the seasonally adjusted, purchase-only HPI, with Nevada, California, Arizona, Florida and Washington taking the top five places.
But the HPI was not the only report to post significant gains.
"October 2013 permit data showed multifamily permitting the highest in five years, with single-family permits just shy of their five-year high. This was a strong report for construction," Jed Kolko, chief economist and vice president of analytics with Trulia, said.
Single-family authorizations in October hit a rate of 620,000, an 0.8% increase from the September figure of 615,000, the U.S. Census Bureau and the Department of Housing and Urban Development noted.
In addition, privately owned housing units authorized by building permits in October were at a seasonally adjusted annual rate of 1.034 million, a 6.2% rise above the September rate of 974,000 and a 13.9% increase from the October 2012 estimate of 908,000.
"These solid permits data are not just due to monthly volatility. The three-month average for total building permits (i.e., Aug-Oct) is also at a five-year high," Kolko said.
However, the construction recovery is uneven across the nation.
Permits are now above local norms in metro Boston, New York City, San Francisco, Austin, Houston, Oklahoma City and San Jose, while they are still way below local norms in Atlanta, Phoenix, Las Vegas, Sacramento, Chicago and Detroit, Kolko noted.
"Overall, this has been a strong 24 hours for housing data. The best news for the housing recovery, though, is the strong permits data. The jump in permits points to more construction activity in the next month or two and more inventory coming onto the market next year," Kolko added.