JACKSONVILLE, Fla. – July 16, 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 April 2012.
“Home prices have risen 2.5 percent so far this year, indicating an exceptionally strong spring,” said Raj Dosaj, vice president of LPS Applied Analytics. “While prices typically see a boost in the spring, the magnitude and speed of this increase and its consistency across the nation have not been seen since October 2005.”
LPS national home price index values from April 2011 – April 2012 were:
|April 30, 2011
|January 1, 2012
|April 30, 2012
The changes in HPI during this time period were:
|April 30, 2011 – April 30, 2012
|January 1, 2012 – April 30, 2012
|April 1, 2012 – April 30, 2012
Figure 1 (below) shows historical HPI values from January 2000 through April 2012, with a focus on the annualized rate of decline from May 2007 through January 2012, which illustrates the recent market bottom according to the seasonally adjusted HPI. The increase in the HPI since the recent low seen in January 2012 has been the most significant since the market peak in 2005. This increase represents an annualized rate of 13.1 percent per year. (This does not suggest that the current pace will continue throughout 2012, but is included to enable a comparison with the rate of decline from the market peak to the recent low).
Average sales per month over the preceding year are also in Figure 1. Current volumes, which include distressed sales due to foreclosure and short sales, are low compared to any period in the last 12 years. The notable recent peak in sales coincides with a trend change in HPI at the end of the first-time buyers’ tax incentive in April 2010.
Prices increased in 563 of the 579 metropolitan statistical areas (MSAs) covered by LPS data during April, and in the remaining 16 MSAs, prices fell less than 0.2 percent. Only two major MSAs saw a slight price decrease – Los Angeles and Hartford, Conn. – declining 0.04 and 0.03 percent, respectively.
Among the MSAs for which both LPS and the Bureau of Labor Statistics provide data (Table 1), only the HPI for Los Angeles did not increase. Cincinnati and Pittsburgh had small increases, but the rest of the MSAs increased by more than 0.5 percent. Recent steep increases in some MSAs are visible in the graphs in Table 1.
Foreclosure and short-sale discounts continue to rise while the difference between the two continues to shrink. The following table shows discounts at the market peak, the end of the sharp decline, the beginning of this year and for the month of April.
||Jan 1, 2012
|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
To view and download the graphics within this release, go to http://www.lpsvcs.com/LPSCorporateInformation/CommunicationCenter/DataReports/HPIReport/201207_HPI/201207_HPI.zip
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.
In this press release, LPS reports price changes of a 'representative' home purchased January 31, 2010, at the average HPI computed from LPS data through January 31, 2012. This price varies across the country; the value for the nation was slightly more than $210,000.
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.