More ivory-tower musings here, and it’s hard to believe that they could be so blind.
How can analysts read these statistics and decide that the frenzy will come to a complete halt, which is what a 2.5% YoY gain will feel like if it were to happen? Because of a break for the holidays?
That’s the best you got?
Predicting that there will be additional inventory for-sale when it’s been plummeting everywhere is naïve too.
At least their headline writer got it right:
‘Lower Appreciation Not Yet Reflected in Gains’
While it is clear that the growth of home prices has started to slow, reports on the results of the deceleration are diverging. Earlier this week Black Knight reported its Home Price Index (HPI) was up 0.6 percent in October, today CoreLogic puts the gain at 1.3 percent.
The CoreLogic report says its reported October appreciation is a full 1 percentage point lower than the peak posted for April. The annual rate of increase in the HPI for the October was 18 percent, identical to the 12-month growth it reported for September, and the highest recorded in the 45-year history of the index. Incidentally, in April the annual increase was 13 percent, showing the rapid run-up of prices over the summer and early fall.
Detached properties(i.e., single-family residences) continue to appreciate at a much higher rate (19.5 percent, also a record high) than attached properties at 12.9 percent. This also differs substantially from the 11 percent gain for single family homes reported by Black Knight which also reported that condo prices are now rising faster than those for single-family houses.
Price gains remain strongest in the Mountain West, with Arizona and Idaho again topping the charts with growth of 28.8 percent and 28.7 percent, respectively. Utah was third at 24.5 percent. Twin Falls, Idaho had the fastest growth among metros at 35.8 percent, but the South did weigh in. Naples, Florida was second at 33.5 percent.
Despite affordability challenges, a recent CoreLogic consumer survey shows that over half of respondents across every age cohort said that owning a home has always been a goal of theirs – further supporting the outlook that consumer desire for homeownership remains.
“New household formation, investor purchases and pandemic-related factors driving demand for the limited supply of available for-sale homes continues to propel the upward spiral of U.S. home prices,” said Frank Martell, president and CEO of CoreLogic. “However, we expect home price growth to moderate over the near term as many buyers take a break for the holidays.”
CoreLogic’s forward looking HPI projects that slowdown to result in a year-over-year increase of only 2.5 percent by next October “as affordability and economic concerns deter some potential buyers and additional for-sale inventory becomes available.”
“Overall, it appears that homeowners will be making a softer landing from the financial impacts of the pandemic than was expected and, while there still will be homes coming on the market because of its impact, they will not boost inventories of homes for sale to the extent that some, such as National Association of Realtors economist Lawrence Yun, have predicted.”
The Monitor says “if meaningful inflow [of available homes] isn’t seen from the post-forbearance population, it could signal a longer-term recovery for inventory levels across the country, which could mean elevated home price growth rates as tightening affordability butts up against a continued shortage of supply.”
For-sale inventories had begun to grow earlier this year, promising relief from the 25 percent deficit earlier in the year, but the improvement has now leveled off and the market faces a 54 percent deficit in properties for sale compared to 2017 to 2019 averages. The number of new listings in October was down only 2 percent year-over-year but more than 12 percent below the average for a pre-pandemic October.
http://www.mortgagenewsdaily.com/12062021_black_knight_mortgage_monitor.asp