Tue, February 16, 2016 - Today?s News : US price growth picks up speed
Tue 16 Feb 2016
Sales of US property cooled in the final stretch of 2015, but price growth continued to pick up speed, according to
the National Association of Realtors.
Total existing-home sales declined 5.4 per cent to a seasonally adjusted annual rate of 5.18 million in the fourth
quarter of 2015 - down from 5.48 million in the third quarter. Prices, though, rose year-on-year, with median
single-family home values up in 81 per cent of the markets measured by the NAR. This was slightly lower than
the 87 per cent recorded in Q3 2015, but growth gathered momentum nonetheless: 30 metro areas (17 per cent)
saw prices jump by double digits, up from 20 in the previous quarter.
For all of 2015, an average of 89 per cent of measured metro areas saw increasing home prices, up from 83 per
cent recorded in 2014.
Lawrence Yun, NAR chief economist, says faster price growth reawakened in the final months of 2015, thanks to
the growing pressure of low supply: "Even with slightly cooling demand, the unshakeable trend of inadequate
supply in relation to the overall pool of prospective buyers inflicted upward pressure on home prices in several
"As a result, homeownership continues to be out of reach for a number of qualified buyers in the top job
producing, but costliest, parts of the country especially on the West Coast and parts of the South."
The national median existing single-family home price in the fourth quarter was $222,700, up 6.9 per cent from
the fourth quarter of 2014 ($208,400). The median price during the third quarter of 2015 increased 5.4 per cent
from the third quarter of 2014.
Yun forecasts little change as 2016 continues, with no rapid increase in construction on the cards. Rising home
prices, despite lower mortgage rates and an increase in the national family median income, caused affordability
to fall in the fourth quarter compared to the fourth quarter of last year.
UK house prices hit the ground running in 2016
UK house prices are hitting the ground running as 2016 gets underway, with values up 6.7 per cent over 2015.
The latest ONS House Price Index show that England let the way with house price growth of 7.3 per cent
year-on-year, followed by 1.5 per cent in Northern Ireland and 1 per cent in Wales. Prices fell 0.2 per cent in
The East drove up England's prices, with the highest annual growth of 9.7 per cent, just ahead of London's 9.4
per cent. (Excluding London and the South East, UK house prices increased by a lower 5.1 per cent in the 12
months to December 2015.)
"Existing homeowners have every reason to be in high spirits after the tenacious house price growth experienced
last year," says Peter Rollings, CEO of Marsh & Parsons. "which saw average values break through the 300,000
barrier. And buyers climbing onto or up the property ladder are hitting the ground running, on the back of
favourable mortgage deals and support schemes from the government."
The agency reports that new buyer registrations have risen 24 per cent in London in the last year, which "bodes
well for purchase activity in the opening months of 2016".
"Landlords and investors in particular will be in a hurry to secure their preferred property before the additional 3%
Stamp Duty becomes liable on second homes in April. But with annual house price growth in London just shy of
double digits, first-time buyers and those trading up also cant afford to hang about either," adds Rollings.