February Home Prices up 6%, QM Rule Said to Build Momentum

Housing continues to make steady gains, especially during a time when the market needs it the most—winter, according to Clear Capital’s March Market Report

As recorded through it’s Home Data Index (HDI), Clear Capital has shown home prices have risen 6.1% annually through February 2013.

Updates on the regulatory front could offer some momentum in building the market’s recovery, according to Dr. Alex Villacorta, director of research and analytics at Clear Capital. 

“The Qualified Mortgage (QM) rule gives lenders more definition on extending credit to homebuyers, who continue to be encouraged by positive economic signs,” says Villacorta. “The real question now is how many of those sidelined borrowers will qualify for a loan under the new rules.”

This annual growth in February marked the strongest yearly gains since August 2010, notes CC, when the Homebuyer Tax Credit was booting demand. 

Despite current home prices having improved notably over the last year, CC expects gains to be moderate over the short term as current yearly gains are measured against the market lows in 2012.

While February’s yearly growth is encouraging, says Villacorta, the rate of growth is measured against the market’s bottom, which CC reported in its March 2012 Market Report. 

Regionally, home prices also saw upticks nationwide. 

National quarterly growth of 1% was supported by quarterly growths among the West (2.1%), Midwest (0.4%), Northeast (0.7%) and South (0.8%) regions, respectively. 

Yearly gains were also positive for these regions, with the West posting the only double-digit growth at 13.6%. Home prices for the Midwest (4%), Northeast (2.6%) and South (5.1%) also rose, respectively. 

While the West continued to lead the recovery with the largest regional gain, notes CC, the growths among the other regions, though modest, still make an impression on consumers.

“Consumer confidence continues to be vital to a broader housing recovery, and national quarterly home prices expanding 1.0% in the midst of winter is confirmation the recovery has legs,” said Villacorta.

Written by Jason Oliva

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