Columbia SC home prices improved year-over-year for the 18th straight month in August, though the arrival of housing's usual "off-season" brought negligible monthly growth.
Home prices nationwide increased 12.4 percent on a yearly basis in August. On a monthly basis, prices were up only 0.9 percent.
Excluding distressed sales, home prices increased 11.2 percent over August 2012 and 1.0 percent over July 2013. Again, no states experienced depreciation.
Columbia SC Home Prices Slowed in August
After a strong run, the rate of Columbia SC home prices appreciating slowed in August. In addition to normal seasonality, the recent sharp rise in mortgage rates off their historic lows was a clear driver behind the slowdown.
Anand Nallathambi, CoreLogic's president and CEO says "For September, the company's Pending HPI indicates prices (including distressed sales) will gain 12.7 percent on a yearly basis and 0.2 percent on a monthly basis, continuing the slowing trend. Removing distressed sales, Columbia SC home prices are poised to rise 12.2 percent year-over-year and 0.7 percent month-over-month.
Meanwhile, Redfin reported another slip in homebuyer demand in August, with both home tours and offers declining.
While homebuyer demand typically falls from July to August—signaling the end of the normally active summer season—this year’s drop in demand was more drastic than usual, says Redfin analyst Ellen Haberle.
Looking ahead to the rest of 2013, Redfin is keeping its eye on mortgage rate trends, which will likely play an even bigger role. "If rates were to spike above five percent, many buyers who have been rushing to find a home while rates are low may step out of the market temporarily, which would trigger a sharp drop in demand," Haberle concluded. "On the other hand, if rates remain stable, we expect demand will flatten this autumn."
Rates are now expected to remain flat or drift a bit lower since the Fed announced it was not yet ready to cut back on its Bond purchase program. This could help Columbia SC home prices as we head into the winter months.
Columbia SC home prices rose in June 12.1% over the last year, according to a recent report from S&P/Case-Shiller's home price index.
While that gain is still robust, it didn't quite match the gain of 12.2% reported for May. Rising mortgage rates may have something to do with that.
"With interest rates rising to almost 4.6%, home buyers may be discouraged and sharp increases may be dampened," according to David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices.
Columbia SC Home Prices On a Tear
Columbia SC home prices have been on a tear for the last twelve months. June marks the first time in over a year that the overall increase has been smaller than the month before. While prices rose in all 20 cities measured by the index, only six cities in June saw price increases larger than the month before, down from 10 cities in May.
Columbia SC home prices are now at early 2004 levels — still around 23% below their peak in mid-2006.
Record-low rates, a lack of new homes on the market and years of pent up demand have been the driving forces behind the recent increase in Columbia SC home prices.
Housing is still expected to remain a key driver of growth for at least the next couple of years. The recovering housing market has been a big part of the nation's economic recovery since the Great Recession. But many fear rising mortgage rates could put a damper on that growth.
While some cheer the Fed stepping back from its unusual bond purchases amid fears the buying will spark inflation, others worry that it may be too soon. Rates have risen more than a full percentage point since May, when Federal Reserve Chairman Ben Bernanke indicated the Fed may soon ease its bond buying program that's helped keep interest rates at record lows.
While increases near double digits for Columbia SC home prices have been common, home appreciation is projected to drop to 6.5% during the 12 months ending March 31, 2014, according to a report released recently. That will follow a 10.2% jump for the preceding 12 months, the first double-digit increase since the peak of the housing boom seven years ago. However prices are still expected to increase significantly over the next few months before they begin to slow.
The forecast is based on the CoreLogic Case-Shiller home price indexes and covers 384 metro areas and more than 80% of the total U.S. housing market.
The chief economist for CoreLogic Case-Shiller has put this down to the improving job market and continued low housing inventory levels. Prices are also expected to turn positive in areas where they have recently declined. In spite of the recent house price gains experts are not worried about a new bubble forming.
Columbia SC Home Prices Still Below Their Peak
Even with the dramatic price increases recently, Columbia SC home prices remain about 26% below their peak.
Meanwhile, after jumping more than one full percentage point in early May, 30-year mortgage rates have stabilized, moving little since then. Stable mortgage rates are only expected to help Columbia SC home prices to stay positive and not retreat as is forecast by the Case-Shiller report. The rise in mortgage rates had very little impact on rising Columbia SC home prices.
The tight supply of available Columbia SC homes for sale is expected to be with us through the end of this year, and possibly into next year as well. The number of homes and condos for sale continue to be down from a year ago.
The latest Case-Shiller report that includes Columbia SC home prices is out, and June saw the first year-over-year increase since 2010. Here’s what this latest report means for the overall economy.
Columbia SC home prices continue to rise, and mortgage rates have risen above 4 percent — depending on your credit and the type of mortgage you’re considering. With all the economic data that’s coming out of late pointing to a full blown recovery in the housing market, now is the time to move if you’ve even been remotely considering buying your own home, or moving up to a bigger home.
Call us for a no-obligation consultation on Columbia SC home prices, and what it would cost for you to get into the home of your dreams now, before prices and mortgage rates rise much further.
Soaring Columbia SC home prices are leaving fewer homeowners owing more money than their properties are worth, bringing them off the sidelines of the surging Columbia SC housing market and offering relief to buyers who are frustrated by bidding wars. As more homes are put up for sale, price increases are expected to moderate.
Increasing Columbia SC Home Prices Unlocking More Supply
The fact that Columbia SC home prices have increased so dramatically has unlocked a lot of the pent-up supply that demand has been screaming for.
At the end of March, 19.8 percent of the nation's mortgaged homes were underwater, down from 23.7 percent a year earlier and 25 percent during the same period of 2011, according to CoreLogic. Gains spread across the country, though regions that rose high and crashed hard remained saddled with homeowners who bought near the peak.
Housing inventories are still unusually low around the Columbia SC area. There was a 5.2-month supply of existing, single-family homes for sale in May, compared to 6.4 months a year earlier, according to the National Association of Realtors. This is still well below the six months that is considered a balanced market.
Economists expect many Columbia SC homeowners will continue to resist selling because they think they can profit more by waiting.
Meanwhile, buyers who need to use conventional financing to be able to afford to buy now are finding it tough to compete with the all cash buyers. Some buyers are even writing personal letters to sellers when making an offer hoping to make a personal connection with the seller.
Columbia SC home prices are expected to continue to increase for the foreseeable future, and interest rates have already moved up from the record lows reached earlier this year. So waiting to buy a home could cost you a lot more. Call us today to discuss your options while Columbia SC home prices are still affordable.