Report Shows Slowest Annual Home Price Appreciation Since 2016
ATTOM Data Solutions, Irvine, Calif., reported home price appreciation in September slowed to a rate not seen since 2016.
The company’s quarterly U.S. Home Sales Report said nearly half of the nation’s markets saw a slowdown in the third quarter. Single-family homes and condos sold for a median price of $256,000 in the third quarter, up 1.0 percent from the previous quarter and up 4.8 percent from a year ago,bthe slowest pace of annual home price appreciation since Q2 2016.
“The continued slowdown in the rate of home price appreciation nationwide and in many local markets is a rational response to worsening home affordability,bwhich has deteriorated at an accelerated pace this year due to rising mortgage rates,” said Daren Blomquist, senior vice president with ATTOM Data Solutions. “Markets not experiencing this price appreciation cooldown may have more of an affordability cushion to work with, but some are in danger of overheating if home price gains continue to run hot.”
Key report highlights:
–The rate of home price appreciation slowed compared to a year ago in 74 of the 150 metropolitan statistical areas analyzed for median home prices (49 percent), including Los Angeles, Chicago, Dallas-Fort Worth, Houston and Miami, all of which posted single-digit percentage gains in median home prices compared to a year ago. Home price appreciation accelerated in 76 metros (51 percent), including San Jose, Calif.; Boise, Idaho; Las Vegas; Grand Rapids, Mich., and Lakeland, Fla., all of which posted double-digit percentage gains in median home prices compared to a year ago.
–Median home prices nationwide in Q3 2018 were 11 percent above the pre-recession peak of $230,000 in Q3 2005 and 77 percent above the post-recession trough of $145,000 in Q1 2012. Median home prices in Q3 were above their pre-recession peak in 103 metros.
–Homeowners who sold in Q3 had owned their homes an average of 8.23 years, up from an average homeownership tenure of 7.97 years in the second quarter and up from 7.98 years in a year ago to a record high going back as far as homeownership tenure data is available (Q1 2000). Among 108 metropolitan statistical areas analyzed for homeownership tenure, Oklahoma City, Okla., had the shortest tenure (6.31 years).
–Homeowners who sold in the third quarter sold for an average of $61,232 more than their original purchase price, the highest average home seller price gain since Q2 2007. The price gain represented an average 32.3 percent return on the original purchase price, up from an average 31.6 percent return in the previous quarter and up from an average 31.4 percent return in Q3 2017, although still below recent peak of 32.5 percent in Q4 2017. Among 156 metropolitan statistical areas analyzed for average home seller gains, those with the highest average home seller percentage gains were San Jose, Calif. (108.7 percent gain); San Francisco (77.3 percent gain); Seattle (69.8 percent gain); Santa Rosa, Calif. (67.9 percent gain); and Salem, Ore. (63.4 percent gain).
–Distressed sales accounted for 11.6 percent of all U.S. single family home and condo sales in the third quarter, up from an 11-year low of 11.2 percent in the previous quarter but still down from 12.8 percent from a year ago.
–All-cash purchases accounted for 27.0 percent of all single family home and condo sales in the third quarter, down from 27.4 percent in the previous quarter but still up from 26.5 percent in Q3 2017.
–Sales to institutional investors (entities buying at least 10 properties in a calendar year) accounted for 2.8 percent of all single family home and condo sales in the third quarter, up from 2.1 percent in the previous quarter but still down from 3.0 percent in Q3 2017.
–Sales to buyers using FHA loans accounted for 10.3 percent of all sales of single family homes and condos in the third quarter, up from 9.9 percent in the previous quarter but still down from 13.3 percent in Q3 2017.
