Trulia: Asking Prices Rise 0.6% in October, Slowing but Still Big Gains

8 Nov

The Trulia Price Monitor and the Trulia Rent Monitor are the earliest leading indicators of how asking prices and rents are trending nationally and locally. They adjust for the changing mix of listed homes and therefore show what’s really happening to asking prices and rents. Because asking prices lead sales prices by approximately two or more months, the Monitors reveal trends before other price indexes do. With that, here’s the scoop on where prices and rents are headed.

Asking Prices Rise 0.6% in October, Slowing but Still Big Gains
Asking home prices increased 0.6% month-over-month in October. That’s the second-slowest monthly gain in seven months. However, even though prices are slowing down compared to earlier this year, the monthly, quarterly, and yearly gains are all high compared with historical norms. In fact, the 11.7% year-over-year increase is the highest since the housing bubble burst. Why this big increase? Asking prices are rising quickly because buying still looks cheap relative to renting – and also because inventory remains tight, even though it has increased since January.

As we reported mid-month, the government shutdown does not appear to have hurt asking prices. There was no difference in the October month-over-month asking-price change between metros more directly affected by the shutdown (i.e. those which are more dependent on federal wages like Washington, D.C.) and other metros. The price slowdown in recent months is primarily because of expanding inventory, rising mortgage rates, and declining investor activity. In coming months, we could see prices slow further if consumer confidence suffers from the ongoing budget uncertainty and future shutdown and debt-default worries.

October 2013 Trulia Price Monitor Summary

% change in asking prices

# of 100 largest metros with asking-price increases

% change in asking prices, excluding foreclosures

Month-over-month,
seasonally adjusted
           0.6%

Not reported

0.1%

Quarter-over-quarter,
seasonally adjusted

3.1%

91

2.6%

Year-over-year

11.7%

99

11.8%

*Month-over-month change is October versus September. Quarter-over-quarter and year-over-year changes are three-month averages. Data from previous months are revised each month, so data being reported now for previous months might differ from previously reported data.
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