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Majority of nation’s housing markets have now recovered from housing recession

But 25% of America's metros have yet to see significant improvement

As home price appreciation strengthens across the country, a report from HSH, an online lending marketplace, suggests home prices have now returned to pre-recession highs in a majority of the nation’s largest housing markets.

However, despite this growth, the company’s report, the Home Price Recovery Index, indicates some markets have yet to see home values peak in the years following the housing recession of 2008.

“Even after years have passed since last decade's boom and bust, at least some homeowners in 25 major metropolitans have not yet seen their homes recover peak values reached during the previous boom,” HSH writes. “With home price gains cooling in a number of areas and with concerns about slowing economic growth filling the headlines, it's beginning to seem likely that a fair number of markets simply won't see strong enough price gains to reach complete recovery before the next economic downturn softens home values.”

According to the company’s index, 75% of America’s largest housing markets achieved full home price recovery in the second quarter of 2019. However, the remaining 25% have yet to see significant improvement.

HSH said this is because home price gains have been hard to come by overall, and in the last three quarters additions to the positive side of the ledger have totaled zero.

“Home price gains have turned decidedly cooler in the last few quarters, and despite lower mortgage rates helping to promote home sales, that was the case again in the second quarter of 2019,” HSH stated. “For the second quarter in a row, only one metro area has climbed out of the ranks of the unrecovered, with the Orlando-Kissimmee-Sanford, FL metro area bringing the total number of fully-recovered markets to 75.”

In June, Black Knight  revealed the nation’s home price growth fell to a near seven-year low during March, marking the 13th consecutive month of slowing home price appreciation.

Throughout the year, several reports have also claimed the country’s home price growth was slowing due to a mixture of factors, including economic uncertainty and inventory disparities.

However, CoreLogic claims there soon may be no need to fret.  According to the company’s, Home Price Forecast, which projects future home price growth, America’s home price appreciation is now projected to climb by 5.4% as early as 2020.  

Frank Martell, the president and CEO of CoreLogic said although the rise in home prices has slowed over the past several months, the company sees a re-acceleration over the next year to just over 5% on an annualized basis.

“Lower rates are certainly making it more affordable to buy homes and millennial buyers are entering the market with increasing force,” Martell said. “These positive demand drivers, which are occurring against a backdrop of persistent shortages in housing stock, are the major drivers for higher home prices, which will likely continue to rise for the foreseeable future.”

NOTE: HSH’s Home Price Recovery Index utilizes data from the Federal Housing Finance Agency to determine which housing markets have fully recovered from the housing recession. The HPI is based on transactions involving conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac, and the time period represented begins with the first quarter of 1991 and runs through the second quarter of 2019.

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