Home Values Rose In November 2009 By Another 0.7 Percent
Reporting on a two-month lag, the government said home values rose 0.7 percent in November.
National home prices are at their highest point since February 2009.
But before we look too much into the FHFA's Home Price Index, it's important that we're cognizant of its shortcomings; the most important of which is its lack of real-time reporting.
According to the National Association of Realtors™, 80% of purchases close within 60 days. As a result, because of its two-month delay, the Home Price Index report actually trails today's market data by an entire sales cycle.
This is one reason why home values appear to be rising even while new data shows that both Existing Home Sales and New Home Sales fell flat last month. The home valuation report is using data from November; the sales reports are using data from December.
The Home Price Index is a trailing indicator and next month, as the Spring Market gets underway, the government will be reporting data from the holidays.
The same is true for the Case-Shiller Index. It, too, operates on a 2-month lag.
All of that said, however, long-term trends do matter in housing and the Home Price Index has shown consistent improvement over the last 10 months. In many markets, home sales are up, home supplies are down, and values have increased. This trend should continue into the early part of 2010, at least.
If you're wondering whether now is a good time to buy a home in Indianapolis , consider low prices, cheap mortgages and an available tax credit as three good incentives.
By May, none of them will likely be available.
Encouraging stats! As you rightly state, with the time lag from the calculation of the figures to the current market conditions, the real estate market recovery you are witnessing could be even stronger. Here's hoping!
Good point made about the lag time in reporting housing data. I agree that now is the time to buy. Don't forget that MCC program offered by the IDCDA - a tax credit that doesn't currently have an expiration date, lasts for the life of your loan, and can be used concurently with the First Time Homebuyers Tax Credit. Check out our blog for more information on this program (www.ahfblog.com).
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