Home Prices up in August, Sharper Increase Predicted for September

Home prices in August posted the largest annual increase in over six years according to data released this morning by CoreLogic.  The company's August Home Price Index (HPI) was up 3.6 percent over the August 2011 index number and was 0.3 percent above the index in July 2012.  This is the sixth consecutive month that home prices have increased nationally on both a month-over-month and year-over-year basis.  CoreLogic's HPI, which includes distressed sales, increased in all but six states

Excluding distressed sales - sales of bank owned real estate (REO) and short sales - home prices increased 4.9 percent on an annual basis in August and 1 percent from the July index.   

Core-Logic is predicting that, when reported next month, September home sales including distressed sales will be up another 5 percent on an annual basis but will fall by 0.3 percent from August figures as the summer sales season comes to a close. When distressed sales are excluded CoreLogic is predicting that it Pending HPI will be up 6.3 percent year-over-year and 0.6 percent month-over-month.

"Again this month prices rose on a year-over-year basis and our expectation is for that to continue in September based on our pending HPI forecast," said Mark Fleming, chief economist for CoreLogic. "The housing markets gains are increasingly geographically diverse with only six states continuing to show declining prices."

Some of the states that took the greatest hits to their home values during the housing crisis are among those bouncing back the fastest.  Arizona had the largest annual percentage increase both including distressed sales (+18.2 percent) and excluding them (+13.0 percent). Idaho was second for all sales (10.4 percent) and fourth when distressed sales were excluded (+8.6) while Utah was second in market sales (+10.0 percent) and fourth (+8.9 percent) when distressed sales were included.

The three states with the greatest depreciation including distressed sales were Rhode Island (-2.6 percent), Illinois (-2.3 percent), and New Jersey (-1.4 percent.)  Excluding distressed sales, prices in Rhode Island were down 1.7 percent, in New Jersey 1.4 percent, and in Alabama -0.2 percent.

 Including distressed transactions, the peak to current change in the national HPI was 26.7 percent.  Without distressed sales the decline was 19.9 percent.  When distressed sales are included the decline was greatest in Nevada (-54.7 percent), Florida (-44.3 percent) and Arizona (-42.0 percent.)

 "Sustained economic recovery in the U.S. requires a healthy housing market. You cannot have a healthy housing market without price stabilization and ultimately home price appreciation," said Anand Nallathambi, president and CEO of CoreLogic. "Improving pricing trends over the past few months and our forecast for continued gains in September bode well for a progressive rebound in the residential housing market."