Bottom of us market nears peak

The bottom end of the US housing market is nearing its pre-recession peak. The lowest tier homes are now priced just 10.1 per cent below the 2006 peak, while the mid-tier (homes selling between $120,000 and $345,000) is the worst performing segment, with current price levels 24.8 per cent below 2006 peak levels.

This vast difference in market recovery underscores the continued challenges the majority of homeowners face, despite a quicker recovery in both the bottom and top segments of the market," notes ClearCapital's latest report.

Indeed, there is significantly mid-tier lag, as has it been hit and buffered by high levels of distressed activity, which, in recent years, has sparked investor activity driven in large part by the accelerated demand in the rental sector. The top-tier, on the other hand, has been more resilient to the economic climate thanks to wealthier buyers.

"Through the first half of 2015, we observed a housing recovery that is normalizing after an impressive price surge from the trough of the market," says Alex Villacorta, Ph.D., vice president of research and analytics at Clear Capital. "After more than two years of a pretty remarkable upward swing, the housing market’s correction-to-the-correction has given way to more normal rates of growth. What we now know, however, is that this correctionary period has not treated all markets, nor segments within markets, the same. In the present environment, micro analysis is key."