Home prices are beginning to stabilize despite weaker-than-expected home sales in the recent months, according to FNC.
The FNC Residential Price Index, which does not include distressed properties, recorded a growth of 0.6% from March to April. According to FNC’s report, the index’s year-over-year change has moderated for a second consecutive month since February. FNC suggests that this is a sign that the annual rate of home price appreciation has peaked.
“Low interest rates and continued declines in home foreclosures contribute to the price gain amid weak housing activity and modest economic growth,” FNC’s report says.
FNC’s RPI is the mortgage industry’s first hedonic price index built on a comprehensive database that blends public records of residential sales prices with real-time appraisals of property and neighborhood attributes. As a gauge of underlying home values, the RPI excludes final sales of REO and foreclosed homes, which are frequently sold with large price discounts, likely reflecting poor property conditions.
FNC also reports that the for sale markets continue to see moderate increases in asking prices and relatively fewer price markdowns, which is consistent with constrained inventory.
FNC’s RPI reports that May’s average asking price rose 2.3% from April and the month’s asking-price discount was 2.2%, down from April’s 2.4%.