HOUSING: ANIMAL SPIRITS STARTING TO TAKE HOLD

Takeaway: Home price appreciation is accelerating. Corelogic's early read on November trends suggests that momentum remains very strong.

*** Tune in for our call this Friday at 11am: "Could Housing's Recovery Go Parabolic in 2013?" ***

Dial in:

Code: 314729# 

 

Home Price Trends Continue to Accelerate

Yesterday's Corelogic home price data release makes adds evidence to the argument that housing's recovery is accelerating. October home prices rose 6.3% YoY, which was a sharp acceleration from September's YoY growth of 5.2%. More to the point, Corelogic has for the last few months provided an early read on the following month. Based on this early read, they estimate that home prices rose 7.1% in November. Moreover, the distressed-excluded home price index is estimated to rise by 7.4% in November. We think it's also worth pointing out that that there was an upward revision of sorts to this October number. One month ago, when Corelogic gave an early read into October pricing, they estimated prices rose by 5.7%. The actual data came in at 6.3%. This month, they're estimating November at 7.1%. 

 

We'll discuss why animal spirits are taking hold in housing on our conference call this Friday. 

 

HOUSING: ANIMAL SPIRITS STARTING TO TAKE HOLD - CL   YoY

 

HOUSING: ANIMAL SPIRITS STARTING TO TAKE HOLD - CL   YoY CL  CS  FHFA

 

HOUSING: ANIMAL SPIRITS STARTING TO TAKE HOLD - CL   Distressed vs non distressed

 

Demand Reinforces Price

Mortgage demand rose +0.1% week-over-week. While +0.1% is nothing to write home about, it is noteworthy in that it is coming off a relatively high base, and marks the fourth consecutive week of positive WoW improvements. In fact, 13 out of the last 16 weeks have been positive.

 

Refinance applications rose 6.0% last week while the average rate on a 30-yr FRM declined 3 bps to 3.40%.  QTD refinance applications are 41% higher than they were in 4Q11.

 

HOUSING: ANIMAL SPIRITS STARTING TO TAKE HOLD - Shark

 

HOUSING: ANIMAL SPIRITS STARTING TO TAKE HOLD - Refi ST

 

HOUSING: ANIMAL SPIRITS STARTING TO TAKE HOLD - Mortgage Rates

 

HOUSING: ANIMAL SPIRITS STARTING TO TAKE HOLD - Shark LT

 

HOUSING: ANIMAL SPIRITS STARTING TO TAKE HOLD - Refi LT

 

HOUSING: ANIMAL SPIRITS STARTING TO TAKE HOLD - YoY

 

HOUSING: ANIMAL SPIRITS STARTING TO TAKE HOLD - Purchase QoQ

 

HOUSING: ANIMAL SPIRITS STARTING TO TAKE HOLD - Refi QoQ

 

HOUSING: ANIMAL SPIRITS STARTING TO TAKE HOLD - Composite QoQ

 

Joshua Steiner, CFA

 

Robert Belsky


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