Regular Altos Research readers will know that watching the headlines for changes in home prices is like looking at your salad to learn how well your garden is tended.
Three months ago, 2015 looked moderately bullish for home prices. Inventory has been low. Mortgage rates have been super low. And the economy has been improving for five straight years.
As we pull into the second quarter of 2015, we’re seeing that the signs are not only still there, they’re actually improving.
The chart below shows the Price of New Listings for the cohort of properties coming onto the market each week, represented by the green line – look at the acceleration in prices this spring. As professional Realtors gauge market demand, they adjust the prices of the homes they’re listing for sale. The New Listings price climbs week over week because Realtors are seeing the demand for their existing listings. This is quite a bullish indicator for prices.
When we dive into the market segments, we can test if the gains are concentrated in one price range. The data shows that while price gains may be a bit stronger at the high end, we see gains broadly across the market and continued gains through until the seasonal peak of June 30. Here’s a view of price per square foot, which illustrates the point quite nicely.
This combination of data gives us a highly confident view for how 2Q 2015 will emerge. If I were betting on housing, or any of the related trades, I’d take a bullish stance. Expect the numbers to report strong all spring.
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