LPS: Home prices in February edge upward
Average home prices across the nation rose a meager 0.2% in February to $195,000, according to LPS Applied Analytics (LPS), with early data from the firm suggesting another flat increase of 0.3% in March.
The increase in seasonally adjusted prices in February was the first rise since March 2010, and only the third rise in seasonally adjusted prices in five years.
However, the Jacksonville, Fla.-based firm remains guarded about the future of the housing market.
“Without a pickup in sales volumes from their current anemic levels, it’s hard to be more optimistic that the market may be nearing the end of its fall,” said Raj Dosaj, LPS vice president. “We’ve been here before.”
Pending home sales increased in March and are well above a year ago, according to the National Association of Realtors. However, fewer Americans acquired new homes in March compared to February, the Commerce Department found, dampening optimism that the housing market could see a material turnaround. Still, numbers are improved from a year ago.
Nonseasonally adjusted home prices rose for a few months in early 2009, 2010 and 2011, but all those gains — and then some — evaporated by the end of summer. As is true in February, those temporary increases were on low sales volumes — about 30% lower than at any point since 1998, Dosaj said.
Furthermore, the inventory of distressed homes remains high, which will continue to put a drag on prices. The time it will take to clear the nation’s shadow inventory contracted one month in the first quarter to 46 months, according to Standard & Poor’s.
Price changes during February among metropolitan statistical areas varied. Of the more than 585 MSAs the LPS HPI covers, prices increased for all of the MSAs (199) in 20 states. Average prices did not increase in all MSAs in the remaining states, but did in 334 of them.
It’s the first LPS HPI report in which the majority of MSAs covered by the firm experienced price increases.