SANTA ANA, Calif. – June 18, 2012 – CoreLogic’s monthly report on home sales, released last week, finds that the level of unsold inventory hit its lowest point in five years.
CoreLogic analysts say negative equity has become a positive force in the real estate marketing. Homeowners who owe more on the mortgage than the currently value of their home choose not to sell right now. That has increased selling prices by limiting the number of homes on the market.
Key findings include:
• The Home Price Index (HPI), including distressed sales, posted two consecutive months of year-over-year increases in April 2012 – the first such increase since the summer of 2010 when the housing market was benefitting from tax credits.
• Single-family construction activity increased 2.3 percent in April, and it’s up 25 percent over the last six months.
• Months’ supply of unsold homes fell to just more than six months in April 2012 and is currently at the lowest level in more than five years.
• As the flow of REOs has slowed over the last 18 months, negative equity has become a positive force in real estate markets by restricting supply in the face of increasing demand.
• The housing market has transitioned from pricing dynamics driven by economic weakness and high shares of distressed sales to one of restricted supply, which will likely exist for some time to come – a reason for optimism in many hard hit markets.
A complete copy of the June CoreLogic MarketPulse report is available online.