JACKSONVILLE, Fla. – June 12, 2012 – Lender Processing Services, Inc. (NYSE: LPS), a leading provider of technology, data and analytics for the mortgage and real estate industries, today announced that its LPS Applied Analytics division updated its home price index (LPS HPI) with residential sales concluded during March 2012.
“In March, our seasonally adjusted HPI increased for a second consecutive month ̶ the first time that has happened since the 2006 market peak,” said Raj Dosaj, vice president of LPS Applied Analytics. “The increase was broad-based geographically, with prices up in nearly every MSA that LPS covers nationwide, with the exception of a handful of California metro areas.”
March sales were near a record low, with volumes not seen since the mid-1990s. Also, as has been the case for the last three years, distressed sales made up a large percentage of the transactions; about 40 percent of March transactions were either foreclosure or short sales.
The LPS HPI for transactions during March 2012 increased to a level comparable to transactions in July 2003. Index values and changes for March 2012 are:
|LPS HPI national home index for this month ($ in thousands)
|Observed and estimated one-month changes
Figure 1 summarizes the HPI’s decline from April 2007 through January 2012 with an average rate of 6.0 percent. The rise since January of this year has been the most significant sequence of increases since the market peak, representing an annualized rate of 9.6 percent per year.
There were increases in prices during March among nearly all metropolitan statistical areas (MSAs). Prices increased in 578 of the 582 MSAs covered by the LPS HPI (four California MSAs were the exception). This is the first LPS HPI report in which such a large majority of MSAs covered by LPS data had price increases. Among the MSAs for which both LPS and the Bureau of Labor Statistics provide data (Table 1), only the HPI for Los Angeles was unchanged. Cincinnati had a small increase, but the rest of the MSAs increased by more than 0.5 percent. Table 1 also shows the dates of local market peaks for each of the largest 26 MSAs. Pittsburgh is the only MSA that, with clear seasonal variations, has seen its HPI rise continuously since January 2005.
Despite the improvement in the market, discounts for foreclosure and short sales continue to converge, and both are larger than they were at the market peak. The following table presents discounts at the three dates indicated in Figure 1.
|LPS HPI national home prices ($ in thousands) for dates shown in Figure 1
|Foreclosure sale dicounts from home prices for these dates
|Short-sale discounts from home prices for these dates
About the LPS Home Price Index
The LPS HPI is one of the most complete and accurate home price sources available. It summarizes sales concluded during each month using a repeat sales analysis of home prices as of their transaction dates. Each month for each of more than 15,500 U.S. ZIP codes, the LPS HPI reports five price levels (quintiles) along with REO discount rates for each ZIP code, which are used in the HPI calculations to correct for the impact on estimates of open-market prices that REO sale prices would have. This level of detail is provided for four property groupings in every ZIP code: i) all residential properties, ii) condominiums, iii) single-family housing and iv) other types of residential properties. Home prices are available with or without seasonal adjustments.
The LPS HPI provides aggregates of all these values for larger geographies than ZIP codes: cities, counties, states, the nation and statistical areas defined by the White House Office of Management and Budget. The five historical paths of price levels can be easily used to find price paths of intermediate prices. By combining property and loan data in its repeat sales analysis, the LPS HPI covers about 83 percent of single-family residential properties in the U.S. The innovative approach used to maximize geographical resolution enables the LPS HPI to meaningfully cover about 98 percent of these properties at the ZIP-code level.
The LPS HPI provides the financial industry with the most accurate valuations available from an HPI -- accuracies competitive with AVMs in out-of-sample tests. The LPS HPI is also the most accurately timed home-price information available – detecting market changes sooner than other HPIs.
About Lender Processing Services
Lender Processing Services (NYSE: LPS) delivers comprehensive technology solutions and services, as well as powerful data and analytics, to the nation’s top mortgage lenders, servicers and investors. As a proven and trusted partner with deep client relationships, LPS offers the only end-to-end suite of solutions that provides major U.S. banks and many federal government agencies the technology and data needed to support mortgage lending and servicing operations, meet unique regulatory and compliance requirements and mitigate risk.
These integrated solutions support origination, servicing, portfolio retention and default servicing. LPS’ servicing solutions include MSP, the industry’s leading loan-servicing platform, which is used to service approximately 50 percent of all U.S. mortgages by dollar volume. The company also provides proprietary data and analytics for the mortgage, real estate and capital markets industries.
LPS is headquartered in Jacksonville, Fla., and employs approximately 8,000 professionals. The company was ranked as the 877th largest American company in the Fortune 1000 in 2012. For more information, please visit www.lpsvcs.com