Home prices across the United States set a new all-time record
for price appreciation, rising at an annualized rate of 18.0
percent in May 2022 from April 2022, according to homegenius Home
Price Index (HPI) data released today by homegenius Real Estate
LLC, a Radian Group Inc. company (NYSE: RDN). The company believes
the homegenius HPI (formerly Radian HPI) is the most comprehensive
and timely measure of U.S. housing market prices and conditions
available in the market today.
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The homegenius HPI also rose 16.3 percent year-over-year (May
2021 to May 2022), a modest jump over the year-over-year increase
of 15.7 percent recorded last month, both represented all-time
records. The homegenius HPI is calculated based on the estimated
values of more than 70 million unique addresses each month,
covering all single-family property types and geographies.
“Despite increasing headwinds, home prices in the U.S. set new
records once again in May,” said Steve Gaenzler, SVP of Products,
Data and Analytics. “While home prices have been increasing at
record paces, there are reasons to expect slowing appreciation
rates in some or all of the country later this year. Historically,
the rate of home price appreciation has been inversely correlated
to mortgage interest rates; the higher the mortgage rate, the
slower price appreciation occurs, and vice versa. Since January
2022, the average 30-year fixed rate mortgage has surged by 285
basis points, the largest increase over six months since 1980 and
the largest percentage increase in U.S. history. Rising from 3.2
percent at the start of 2022 to 5.78 percent in the latest weekly
report, mortgage rates are 80% higher (256 basis points) than just
six months ago. Strong home price appreciation combined with
rapidly increasing mortgage financing costs is a double whammy for
home affordability and consumer confidence,” added Gaenzler.
NATIONAL DATA AND TRENDS
- Median estimated home price in the U.S. rose to $325,684
- Percentage of lower-priced homes sold fell to lowest on
record.
Nationally, the homegenius HPI estimated the median price for
single-family and condominium homes rose to $325,684. Across the
U.S., home prices nationally rose 15.5 percent over the last three
months, much higher than the 13.2 percent reported for the three
months from February through April. Home prices remain buoyed by a
supply and inventory of homes for sale that continues to decline.
While inventory of homes for sale rose by six percent in May from
the prior month, supply was five percent lower than May 2021 and is
35 percent lower than the average of the month of May in
2017-2020.
The mix of homes sold by price band provides valuable
information on what is driving home price growth. In May, only 23.3
percent of homes sold cost less than $250,000, the lowest recorded
percentage for that category and roughly half of the 43.9 percent
tally from just two years ago. In contrast, 34.6 percent of homes
sold in May cost more than $500,000, which is more than 4.0 times
larger than the 8.2 percent share recorded a decade earlier (May
2012). This shift towards higher-priced homes has a beneficial
impact on the growth rate of indices that only measure home prices
of sold properties (i.e., repeat sales and median sales price
indices). The homegenius HPI measures the change in value to all
properties based on the entire housing stock, not the mix of homes
that happen to transact in a given month.
In May, the number of homes that were sold increased from the
prior month by 2.6 percent. Over the first five months of 2022, the
aggregate count of home sales nationally was 5 percent lower than
the first five months of 2021. However, sales were five percent
higher than the average of the same 5 months (Jan-May) in each of
the prior four years (2017-2020).
REGIONAL DATA AND TRENDS
- All U.S. Regions appreciated at a faster rate in May
- South records 11th straight month as strongest region
In May, home price appreciation rose from the prior month in all
regions. After finding a recent low in appreciation rates in
February or March of this year, the homegenius HPI has seen stable
growth in home prices broadly across geographies. The South
(+21.5%), Mid-Atlantic (+17.4%), and Southwest (+17.3%) recorded
the strongest month-over-month annualized gains. The South region
has been the strongest region for eleven consecutive months, and
fourteen of the last nineteen months.
All six regions recorded actual 12-month price appreciation
rates between 13.0 and 21.5 percent, signaling a robust market in
all parts of the U.S, although with wide disparity in performance.
The result of the continued strong gains in home prices equates to
record levels of homeowner equity. In aggregate, the rise in home
values over the past year equates to more than $6.5 trillion
dollars of new equity for homeowners.
METROPOLITAN AREA DATA AND TRENDS
- Tampa Bay, FL leads all metro areas in appreciation rate
- Slightly slower appreciation the norm in most, larger
metropolitan areas
While all regions continued to report strong price appreciation
rates in May 2022, only three metropolitan areas (Philadelphia, PA,
Baltimore, MD, St. Louis, MO) recorded faster price appreciation
when compared to the prior month (April 2022). Four metros (Tampa,
FL, Atlanta, GA, Miami, FL, Dallas, TX) have reported three
straight months of annualized one-month appreciation rates in
excess of 20 percent. Tampa, FL was the strongest metro area this
month (+26.5% annualized 1-month appreciation). While the general
regional numbers remain strongly positive, this month’s slower
readings in 17 metros (in a month that is typically rising due to
seasonal influences) suggest that regional markets across the U.S.
may start to show signs of slowing home price appreciation.
The metro areas that reported the largest slowdowns relative to
the prior month are all in the West. Three metro areas in
particular, San Francisco, CA, Seattle, WA, and San Diego, CA,
showed substantial slowdowns in appreciation rates. The average
annualized one-month change for each was down more than 45 percent
from the prior month’s appreciation rate. Each of them, however,
has a 12-month appreciation rate in excess of 10 percent.
In an unusual twist, Tampa, FL went from the weakest of our top
metros one year ago to the strongest in May 2022, while San
Francisco, the weakest this month, was actually the strongest one
year ago.
ABOUT THE HOMEGENIUS HPI
homegenius Real Estate LLC, a subsidiary of Radian Group Inc.,
provides national and regional indices for download at
radian.com/hpi, along with information on how to access the full
library of indices.
Additional content on the housing market can also be found on
the homegenius and Radian News and Insights pages.
homegenius offers the HPI data set along with a client access
portal for content visualization and data extraction. The engine
behind the homegenius HPI has created more than 100,000 unique data
series, which are updated on a monthly basis.
The homegenius HPI Portal is a self-service data and
visualization platform that contains a library of thousands of
high-value indices based on both geographic dimensions as well as
by market, or property attributes. The platform provides monthly
updated access to nine different geographic dimensions, from the
national level down to zip codes. In addition, the homegenius HPI
provides unique insights into market changes, conditions and
strength across multiple property attributes, including bedroom
count and livable square footage. To help enhance customers’
understanding of granular real estate markets, the library is
expanded regularly to include more insightful indices.
homegenius Inc., a subsidiary of Radian Group Inc. (NYSE: RDN),
and its family of companies combine an array of title, real estate
and technology products and services into a full-service ecosystem.
homegenius offers innovative experiences from search to close,
enabling mortgage lenders, mortgage and real estate investors,
consumers, GSEs, and real estate brokers and agents to benefit from
integrated and personalized solutions leveraging advanced
technology and the latest advancements in data science, machine
learning and artificial intelligence. For additional information on
the homegenius family of companies, visit homegenius.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20220628006083/en/
For the Media: Rashi Iyer – Phone: 215.231.1167 Email:
rashi.iyer@radian.com
For Investors: John Damian – Phone: 215.231.1383 Email:
john.damian@radian.com
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