CoreLogic Sees Sign of Normalization in Housing Market

House prices and existing home sales are back to normal levels, according to the chief economist of CoreLogic Mark Fleming.

Price appreciation over the last year and half has taken home values back to or about normal, Fleming says in an interview with NMN.

Housing was overvalued by 20%-plus at the end of the boom. Then we collapsed and overshot by about 10%, he says. Our analysis basically shows we significantly overshot fundamental price levels on the way down.

The market undervalued prices by 10% at the bottom. The housing market has recovered since then and today it is back to normal.

Fleming sees prices flat-lining on a month-to-month basis during the fall and winter months before turning up in March. The chief economist forecasts home prices will rise 6% from September 2013 to September 2014.

Fleming also noted that the turnover in homes has returned to a normal level.

However, mortgage lenders are financing about two-thirds of existing home sales because of all-cash transactions and distressed sales.

In addition, new home sales are improving but still remain way below normal levels.

This is making the adjustment from a refinance market to a purchase mortgage market more difficult, Fleming says. The purchase market is not as large as it used to be.

Article source: http://www.nationalmortgagenews.com/dailybriefing/CoreLogic-Sees-Sign-Normalization-Housing-Market-1039613-1.html

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