Nationally, home prices in December rose 0.9% over the rolling quarter, nearly unchanged from November's quarterly rate of growth of 1.0%. Mild quarterly gains likely reflect some pause from buyers who tend to put purchase plans off over the holiday and winter season.
The Midwest and the South, each with quarterly gains of 0.6%, saw December trends soften slightly over November. When compared to the heat of the summer, it's clear the momentum from the Midwest and the South has stalled, where in July quarterly prices gained 2.1% and 1.5%, respectively.
The Northeast experienced gains of 0.3% over the rolling quarter, nearly unchanged over the prior month's rate of growth. Moderate price changes are not out of character for the region, where quarterly price gains surpassed 1.0% one time in 2012, and 0.5% only twice over the course of the year.
The West was the only region to see a slight uptick in quarterly price gains, with 2.1% growth. As reported throughout the year, the West has been the front-runner of the recovery. December home price trends offer further confirmation of the strongest regional rebound happening in the Western region.
December Yearly Trends and 2013 Forecasts: Long-term trends strengthen in December, but expected to moderate over 2013.
National year-over-year price gains picked up steam in December, coming in at 4.9%. Closing the year out just shy of 5.0%, December yearly gains, as measured against the market lows at the start of 2012, will likely be a high watermark for the near-term recovery. Through 2013, national home prices are forecasted to grow by 2.1%. The more than 50% reduction is expected partly because of a higher starting price base, now a full year into the recovery. At the regional level, there are no surprises in year-over-year growth. The West leads while the Northeast continues to struggle.
The West experienced a continuation of impressive year-over-year growth, up to 11.8% in December. The ramp up in gains again reflects a market that was hard hit, and, like national prices, saw its lowest price level at the start of 2012. A forecast of just 2.8% for 2013 points to a moderating recovery for the West, as buyers adjust to a higher priced market.
The last time the South saw gains at year's end was in 2006. So the region's year-end gains of 4.0% marks an overall great year for the South. Only once this year did the region see gains over 4.0%, while 2.0% price gains are forecasted through 2013.
This time last year, the Midwest saw prices fall by 3.0%. Current home prices have notably improved with December prices rising 3.0% year-over-year, just 0.1 percentage point higher than in November. The Midwest's recovery is forecasted to unfold into 2013, with expected yearly gains of 2.3%.
As expected, the Northeast saw the lowest rate of yearly growth among all four regions at 1.5%. While it was the first to see minor gains of 0.1% in January 2012, the regional recovery never took hold. Yearly price gains only broke out above 2.0% once over the year. And more of the same is forecasted in 2013, with yearly gains expected to hit only 1.4%.
Top 50 Major Metro Markets: Advanced recoveries for some, continued volatility for others.
Major metro markets continued to experience a wide range of price trends in December, with continued variability expected through 2013. While each market's home price trends remain dependent on local economic conditions, there are some commonalities. The strongest recoveries have generally unfolded in two types of markets: Hard-hit markets like Phoenix, Miami, and Las Vegas, offering investors attractive deals, and markets like Seattle, San Jose, and San Francisco, with relatively strong local economies attracting buyers despite relatively high price points.
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