Property values continue to rise across the nation, and the housing market is well into its sixth year of recovery, according to a market report from FNC, an industry provider of appraisal compliance expertise.
Mortgage delinquencies and home foreclosures are at their all-time lows since 2007 as the market improves each year.
Early estimates show the average home price in April was $231,000, an increase of 7.4% from the same time last year. At this rate, home prices could rise above the 2006 to 2007 peak levels by this summer, according to the report.
Whereas the rate of appreciation was much higher in 2012 and 2013 with increases in the double digits, the market has since leveled off to a more sustainable rate of 5% to 6% increases since dropping to lows in 2014.
This chart shows median price sales patterns:
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(Source: FNC National Collateral Database)
Similar to 2013 through 2015, Spring 2016’s home buying market struggled with bidding wars and low inventory, according to the report. The limited inventory is prohibiting would-be homebuyers from finding a home.
These shortages could be pushing home prices out of reach for first time homebuyers, who make up about 30% of total homebuyers, according to the report. Homebuyers paid an average of $137,000 for a starter home in March, up 6% from last year. In fact, in the past 18 months, starter home prices rose 1.5% to 2% faster than the median home price.
This chart shows median home prices versus starter home prices:
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(Source: FNC National Collateral Database)
Of course, first time buyers face a harder time on the West Coast, where home prices continue to soar, as opposed to the Midwest markets, where first time buyers are not affected as much.
This chart shows the difference between some of the markets:
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(Source: MSA-level FNC Residential Price Indices)
