Reporters discuss bombshell story on Better.com’s CEO

An exclusive interview with the Forbes reporters who recently wrote a bombshell article about Better.com CEO Vishal Garg’s controversial workplace culture.

Now is the time to double down on diversity and inclusion efforts

Quicken Loans Mortgage Services is proud to partner with a diverse set of brokers, which broadens the pool of potential clients they serve together.

How to Accelerate Closings in 2021

In this webinar, we’ll provide you with actionable insights to help you accelerate your closing process from point-of-sale through post-closing.

Why are sellers sitting on the housing market sidelines?

Why aren’t more homeowners selling in this hot housing market? According to new research from Zillow, a number of factors are at play.

Investments

Second look: Home price surge unlikely to last

Days of rapid price increases coming to an end

CoreLogic’s (CLGX) report on Tuesday showed tepid monthly home price growth but a solid yearly growth of 5.6% for February.

While it seemed to suggest that price growth shifted into a higher gear at the start of 2015, analysts at Capital Economics say that with housing close to fair value and the Fed set to begin tightening policy later this year, they don’t expect such rapid monthly gains to be sustained for long. 

“The 1.1% (monthly) rise in the CoreLogic house price index in February was unusually strong for this time of year,” writes Ed Stansfield, chief property economist for Capital Economics, in a client note. “Indeed, our own seasonal adjustment suggests that prices rose by an even stronger 1.3% (monthly), following January’s downwardly-revised 0.9% gain. This was close to a two-year high, and pushed the annual rate of price growth to 5.6%, up from 5.1% the previous month.” ?

Stansfield says that it’s not surprising that price pressures have increased at the start of this year. After all, the recent pick-up in home sales, along with the subdued number of homes coming onto the market, has caused supply conditions to tighten. In this context, and with real incomes and employment growing strongly, we expect house price inflation to accelerate to around 6.5% this year.

Click to enlarge

(Source: Capital Economics)

“However, the scale of the revision to last month’s data, which saw a 1.1% (non- seasonally adjusted) rise cut to just 0.6%m/m, mean that we are inclined to take the latest CoreLogic numbers with a pinch of salt,” he says.

The surge in price growth that they suggest is contrary to the moderation implied by the alternative Case-Shiller index.

“We suspect that the truth may lie somewhere in between,” Stansfield says.

He says with expectations of price growth muted, housing now close to fair value and the Fed set to begin raising interest rates later this year, this seems unlikely. 

“Accordingly, while the conditions are certainly in place for a moderate acceleration in price growth this year, it looks like the CoreLogic index may be getting ahead of itself. We expect a return to more stable growth of around 0.5%m/m soon,” Stansfield says. 

Most Popular Articles

The downside of the hot 2020 housing market: rapid home-price growth

The mismatch in the COVID deflationary impact toward the economy overall and the strength of the housing market due to demographics makes for a troubling formula for home-price growth, which we are seeing. The recent NAR existing home sales report showed 15.5% year-over-year growth in prices. HW+ Premium Content

Nov 30, 2020 By

Latest Articles

Fannie and Freddie need “significant capital” to leave conservatorship, Mnuchin says

In a hearing before the House Financial Services Committee, Treasury Secretary Steven Mnuchin said no definite plans have been made for the future of Fannie Mae and Freddie Mac, but discussed the idea that they could be released from conservatorship before their full capital levels are reached.

Dec 02, 2020 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please