Home Price Increases Slow; Prices 11 percent below Peak

Home price increases wound down further in August.  The Home Price Index released by Black Knight Financial Services today rose a negligible 0.1 percent from July to August and was 4.9 percent higher than a year earlier.  In August of 2013 the year-over-year price gain was 9 percent and as recently as April increases were running 6.4 percent on an annual basis. 

The company said that nearly half of the 20 largest states actually saw price declines from July to August although eight of the largest metro areas hit new peak price levels.  Black Knight's Home Price Index for the U.S. was $241,000 in August, the same number as in July.  The HPI registered $230,000 in August 2013.

Prices in the U.S. are now 10.1 percent below the peak level of $268,000 established in June 2006.   The metropolitan areas with new price peaks established in August were Austin, Dallas, Denver, Honolulu, Houston, Nashville, San Antonio and San Jose.

The states with the largest price increases were New York, Michigan, and Nevada where prices rose 0.6 percent from July to August, and South Carolina and Texas, each with increases of 0.5 percent.  At the other end of the scale were Wisconsin, Missouri, and Virginia where prices declined by 0.5 percent, followed by Georgia and the District of Columbia, down 0.4 percent.  Colorado and Texas again established new high points for their home prices, something each has done routinely for over a year.

Among the metropolitan areas that had increases greater than the national average were Detroit and The Villages in Florida, both up 0.9 percent, Myrtle Beach and Reno saw increases of 0.8 percent, and Naples Florida and Houston, were 0.7 percent higher.  It was the second straight month in which beleaguered Detroit led the nation in price gains.  Ocean City and Atlantic City, New Jersey, Torrington, Connecticut, Milwaukee, and St Louis all had 0.7 percent declines from the previous month.

Black Knight's HPI represents a repeat sales analysis of home prices as of their transaction dates for more than 18,500 U.S. Zip codes.  The index represents the price of non-distressed sales by taking into account price discounts for lender owned real estate (REO) and short sales.