Home Prices Are Still Rising

CoreLogic released its June 2015 CoreLogic Home Price Index (HPI) which shows that home prices nationwide, including distressed sales, increased by 6.5 percent in June 2015 compared with June 2014. This change represents 40 months of consecutive year-over-year increases in home prices nationally. On a month-over-month basis, home prices nationwide, including distressed sales, increased by 1.7 percent in June 2015 compared with May 2015.

Including distressed sales, 35 states and the District of Columbia were at or within 10 percent of their peak prices in June 2015. Fifteen states and the District of Columbia reached new price peaks—Alaska, Arkansas, Colorado, Hawaii, Iowa, Kentucky, Nebraska, New York, North Carolina, North Dakota, Oklahoma, South Dakota, Tennessee, Texas and Wyoming. The CoreLogic HPI begins in January 1976.

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Excluding distressed sales, home prices increased by 6.4 percent in June 2015 compared with June 2014 and increased by 1.4 percent month over month compared with May 2015. Excluding distressed sales, only Massachusetts (-1.5 percent) and Louisiana (-0.1 percent) showed year-over-year depreciation in June. Distressed sales include short sales and real estate-owned (REO) transactions.

The CoreLogic HPI Forecast indicates that home prices, including distressed sales, are projected to increase by 0.6 percent month over month from June 2015 to July 2015 and by 4.5 percent** on a year-over-year basis from June 2015 to June 2016. Excluding distressed sales, home prices are projected to increase by 0.5 percent month over month from June 2015 to July 2015 and by 4.2 percent** year over year from June 2015 to June 2016. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

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“The tightness of the for-sale inventory varies across cities. Throughout the U.S., the months’ supply was 4.8 months in the CoreLogic home-listing data for June, but varied greatly across cities. In San Jose and Denver, there was only 1.6 months’ supply of homes on the market, whereas Philadelphia had a 7 months’ supply and Providence had a 6.6 months’ supply,” said Frank Nothaft, chief economist for CoreLogic. “The stronger appreciation was registered in cities with limited inventory and strong homebuyer activity, such as San Jose and Denver.”

“The current cycle of home price appreciation is closing in on its fourth year with no apparent end in sight,” said Anand Nallathambi, president and CEO of CoreLogic. “Pent-up buying demand and affordability, together with higher consumer confidence buoyed by a more robust labor market, are a potent mix fueling a 6.5 percent jump in home prices through June with more increases likely to come.”