This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Home Prices Likely to Rise 6% in 2013: Core Logic

NEW YORK ( TheStreet) -- Home prices are likely to rise by 6% in 2013 on the back of higher demand, lower distressed sales and low inventory levels, Core Logic projected in its January Market Pulse report released Monday.

"Rising home prices will slowly release the pent-up supply of inventory as under-equitied borrowers are unlocked and opportunistic sellers begin to provide relief to tight inventories," economist Same Khater wrote. " In addition, household formations have increased in the last 18 months, providing a nice base of support for housing demand."

The Core Logic Home Price Index rose 7.5% in 2012, the largest increase since 2006. Total home sales rose 6% to 4.2 million, the first increase since 2005.

Helping the price increase was a decline in foreclosure sales and an improvement in non-distressed sales.

Sale of foreclosed homes declined 20% to 600,000, marking a third consecutive decline, as banks pursued other alternatives to foreclosure amid a growing backlog of foreclosure cases in courts.

Short sales rose 23% to 370,000. While short-sales are distressed sales, they sell at a lower discount to market prices than foreclosures and therefore, have a less negative impact on home prices overall.

Non-distressed home sales increased 11%, amid tight supply, while new home sales increased 3%. Inventory levels were low as potential sellers were locked out of the market. "Many trade-up borrowers have been locked out of the market because their outstanding loan balance is greater than the value of their home," Khater wrote. " Current owners need to sell at prices high enough to extinguish their debt and provide equity for their next home purchase."

As prices rise, however, more borrowers might see their equity being restored, allowing them to sell their homes.

Mortgage delinquency trends also improved in 2012. Seriously delinquent rate declined to 6.9% from 7.4% in 2011. At the end of November 2012, the number of seriously delinquent loans stood at 2.6 million, down 15% from a year earlier.

Declines in delinquent loans have been helped by modifications under the government's HAMP program, and increasingly, due to foreclosure resolutions.

"Improvements in the labor market and home prices" are two important factors that would help delinquency rates in 2013, according to the report.

-- Written by Shanthi Bharatwaj in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
XHB $36.85 0.00%
XLF $24.28 0.00%
AAPL $126.37 0.00%
FB $83.20 0.00%
GOOG $552.03 0.00%

Markets

DOW 17,976.31 +263.65 1.49%
S&P 500 2,086.24 +25.22 1.22%
NASDAQ 4,947.4410 +56.2220 1.15%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs