Home prices jump nearly 11% in April

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Still, they are 18% below the peak set in July 2006, according to S&P/Case-Shiller. And price gains are slowing.

"Although home prices rose in April, the annual gains weakened," says David Blitzer of S&P Dow Jones Indices. "Last year some Sunbelt cities were seeing year-over-year numbers close to 30%, now all are below 20%."

Low mortgage rates, which the Federal Reserve is expected to keep reined in through mid-2015, and gains in the job market should continue to help the housing market, according to Blitzer.

But don't get too comfortable.

Home sales are being supported by all-cash buys and low supply, said Blitzer. And he says qualifying for a mortgage is still a problem.

"First time home buyers are not back in force," he said.

Related: Dream beach houses for sale

First Published: June 24, 2014: 9:09 AM ET

Real estate prices to stabilize and reverse the course within two years - analysts

Two analysts of the Bank of America Merrill Lynch (BAML) defend what they call their views of great strong conviction for what should happen in the world of housing over the next two years.    Chris Flanagan and strategists Gregory Fitter, ABS and MBS say that their views are mainstream step but that recent data had corroborated their theories.

The two argue that house price increases will continue to moderate the skyrocket trajectory, they were on end 2012 and early 2013 will be peak in mid-2016.  In second place, as unemployment continues to facilitate, the yield curve will continue to flatten (a longer-run rate if lower, while that shorter term rates increase, relative to one another) and the gap between two-year and 10-year Treasury yields should be zero by the time real estate prices peak.  The long end of the curve will be surprising to low yields, encouraged by a soft housing market and low inflation.

The first "great view", that the prices of houses will culminate in two years, it is validated they say with the most recent real estate price income Case Shiller-based model.  Graphs 1 and 2 includes the Case Shiller historical and forecast house price index (HPI) and the strategists of the BoA's fair value estimate.  This model shows that the HPI will increase top-level quarter 2014 of 155.5 to a peak of 167.3 in the third quarter of 2016.  It's an annualized growth of 3 percent to more than 30 months, compared to 11% in 2013 and the rate annualized 9.5% since prices bottomed in the fourth quarter of 2011. Then the price should decrease and not to resume the level of 2016 until 2022 Q2, an annualized rate of growth in prices in more than six years of 0.  With this account, the growth rates annualized domestic price between 2014 Q1 and Q2 2022 is expected to reach 1.0 percent.

The authors estimate that the Case-Shiller HPI already exceeded 9.7 per cent valued in the first quarter of this year from the author of fair value estimate and it was 6.2% undervalued when it touched the bottom in 2011, a swing of 16 per cent in assessment in two years.  Last time, we observe such a rate of acceleration was in 2002, the beginning of the real estate bubble.  Template projects of the author that the prices will be overstated by 12 percent next year end or at the beginning of 2016 and this will eventually lead the decline in the price, probably less than fair value.

The return under fair value reflects what happened before, during and after the crisis housing, but at a lower level of recosting.  During the early 2000s overvaluation of housing boom peaked in Q1 2006 at 58.9 percent before prices decreased by 34%, exceeding fair value at the base.  It will be very different this time, mainly due to the regulatory framework, including Dodd-Frank, which has been implemented in response to the boom and bust.  After peaking this time, they expect the prices stay flat or unchanged for six years, not collapse as it occurred ten years earlier. exactly what the regulatory framework was supposed to do.  "From this perspective,"they say, "0% 2016-2022 house price growth seems to us a fantastic result and exactly what policymakers had hoped during the establishment of the new regulatory framework."

Given this scenario, the authors ask what may be the catalyst to increase interest rates.  If anything, they have lower rates, by the way, seem even more plausible. "It is difficult for us to see what generates any significant and sustained increase in the volatility of interest rates.

The authors cite also the report can CoreLogic published early July as another justification for their theory of the slowdown in the growth of prices.  CoreLogic, with more recent data than that provided by Case-Shiller, watch-year (YOY) price domestic growth may of 8.8%, down 3 percentage points from 11.8 per cent in February, which the authors believe will prove to be the cyclical peak.  Annual growth of 11.5 percent had persisted since early 2013.  The decline of the "tip" of February began in March and accelerated the downward in May.

Similarly, (MOM) data from month to month annualized slow down temporarily after mortgage rates increased in mid-2013 to level 20 percent at the beginning of the year.  While January and February 2014 were exceptionally strong rate of 26.0 and 16 percent respectively growth then began to slow down.  Data from MOM for may showed an increase of 1.7% after 2.4% in April.  Flanagan and installer says April that CoreLogic and may readings suggest that their own model whereby a 3% rate of growth of prices for 2.5 years followed by 1 percent for the next eight years begins to realize.

Their second point of view that massive yield curve flattening began with the new year and will continue until that spreads from 2 to 10 year zero hit in 2016 is reinforced by the latest unemployment report.  Graph 4 shows their vision of the relationship between unemployment and the "spreads" of the two yield curve.  The unemployment rate decreased in a fairly linear manner since the peak in October 2009.  Extrapolating the decline towards the front, they believe that unemployment will rise to 5% by 2015, and 4% by early 2017.  Historically, it was not long after unemployment is less than 5 percent the year of 2 to 10 spreads approach or drop below zero.

Analysts concede concerns of the Fed Chairman Janet Yellen all soft labour market could mean it will be different this time, but they want to their theory. that the decline in unemployment will force the Fed to act and the zero rate will be obtained on the schedule they plan to undertake.

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Home prices jump nearly 11% in April

AppId is over the quota
AppId is over the quota

Still, they are 18% below the peak set in July 2006, according to S&P/Case-Shiller. And price gains are slowing.

"Although home prices rose in April, the annual gains weakened," says David Blitzer of S&P Dow Jones Indices. "Last year some Sunbelt cities were seeing year-over-year numbers close to 30%, now all are below 20%."

Low mortgage rates, which the Federal Reserve is expected to keep reined in through mid-2015, and gains in the job market should continue to help the housing market, according to Blitzer.

But don't get too comfortable.

Home sales are being supported by all-cash buys and low supply, said Blitzer. And he says qualifying for a mortgage is still a problem.

"First time home buyers are not back in force," he said.

Related: Dream beach houses for sale

First Published: June 24, 2014: 9:09 AM ET

UK house prices 'surpass 2007 peak'

The average UK property price is now £188,903, according to the Nationwide UK house prices have risen above their peak of 2007, the Nationwide has said, after prices climbed 1% in June and were up 11.8% from a year earlier.

The building society said the average value of a UK property was £188,903, but in London it had surpassed £400,000 for the first time.

Despite the acceleration in house prices, it said there was "significant variation" across the country.

And it expected price gains to slow in London from July onwards.

The Nationwide based this view on "anecdotal evidence" from surveyors and estate agents.

Regional variations

The annual rise in house prices accelerated from 11.1% in May to 11.8% in June, with all regions across the UK seeing an increase.

Prices increased by 1% in June, compared with a 0.7% rise in May. This was the 14th successive monthly increase in prices.

The figures are based on the Nationwide's own mortgage data and are the first snapshot of prices and activity in the housing market in June.

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Other surveys in recent months have echoed the view of local markets moving at a different pace. The Land Registry said last week that prices were still falling in some areas of Wales and the North West of England.

The south of England continues to see the strongest growth in house prices, various surveys have said.

The Nationwide said London saw the sharpest rise, with prices up almost 26% in the three months to the end of June compared with the same period last year. This pushed them 30% above their 2007 peak.

However, it predicted that price growth in the capital was slowing, a view drawn from some London estate agents.

"There are already signs that buyers are starting to say enough is enough," said James Hall, director of London estate agents Fishneedwater.

"Whereas a few months ago, buyers were offering silly prices on some very average properties, the silly season in the capital seems to have passed.

"Buyers are now taking their time, and making fair offers. We are definitely seeing fewer properties going for or over asking price."

Mortgage approvals - which signal future house sales - have slowed in recent months, Bank of England data shows.

Continue reading the main story Lack of supply Nationwide's chief economist Robert Gardner said recent moves by the Bank of England's Financial Policy Committee (FPC) to ensure the UK housing market does not overheat, were unlikely to have a "significant impact".

The FPC recently announced an insurance policy against an overheating market, consisting of:

Ensuring lenders check mortgage applicants can cope with a three percentage point rise in interest rates - slightly tougher than current affordability checksFrom October, limiting risky lending by putting a 15% cap on the number of mortgages that banks and building societies can give to people who want to borrow more than 4.5 times their income

"Most major lenders are already using a stress rate in their affordability calculation... similarly, the proportion of house purchase loans at or above 4.5 times borrowers' income is currently some way below the 15% cap," he added.

But Mr Gardner said rising expectations that interest rates might increase earlier than expected could dampen housing activity, although the lack of homes coming onto the market or being built still meant demand exceeded supply which would continue to push up prices.

"It is important to note that the Financial Policy Committee does not have the tools to address the fundamental problem with the housing market - the lack of supply," he said.

Region Average price Annual change