Supply/Demand Pushing Home Prices Higher
Nationwide home prices are now within 10 percent of their pre-crash peaks and seven states have surpassed those peaks, some have been establishing new high marks for several months. CoreLogic said today that its Home Price Index (HPI) that tracks that home prices nationwide, including distressed sales, rose in March for the 37th consecutive month on a year-over-year basis.
The HPI was up 5.9 percent in March 2015 compared with March 2014 a +2 percent change from the year over-year HPI increase in February. The March HPI was also up 2 percent compared to the previous month.
The states with the greatest increase in its HPI including distressed sales were: Colorado (+9.2 percent), South Carolina (+9.1 percent), Kansas (+8 percent), Texas (+8 percent) and Nevada (+7.6 percent). Two states and the District of Columbia experienced home price depreciation; Connecticut was down 0.6 percent, the District of Columbia decreased 0.2 percent and Maryland was off 0.1 percent.
Excluding distressed sales, home prices increased by 6.1 percent in March 2015 compared with March 2014 and increased by 2 percent month over month compared with February 2015. The five states with the highest home price appreciation were: Kansas (+9.5 percent), Colorado (+8.5 percent), South Carolina (+8.2 percent), Florida (+7.9 percent) and Texas (+7.6 percent). Only New Mexico (-0.4 percent) showed year-over-year depreciation on the HPI excluding distressed sales which include short sales and real estate-owned (REO) transactions.
"The homes for sale inventory continues to be limited while buyer demand has picked up with low mortgage rates and improving consumer confidence," said Frank Nothaft, chief economist for CoreLogic. "As a result, there has been continued upward pressure on prices in most markets, with our national monthly index up 2 percent for March 2015 and up approximately 6 percent from a year ago."
CoreLogic projects that its HPI including distressed sales will increase by 0.8 percent from March to April 2015 and by 5.1 percent from March 2015 to March 2016. For the HPI excluding distressed sales the monthly increase is predicted at 0.7 percent and the annual increase from March 2015 to March 2016 at 4.7 percent.
"All signs are pointing toward continued price appreciation throughout 2015. In fact, the strong month-over-month gain in March may be a harbinger of accelerating price appreciation as we enter the spring selling season," said Anand Nallathambi, president and CEO of CoreLogic. "Tight inventories, job growth and the inexorable impact of demographics and household formation are pushing price levels in many states, and especially large metropolitan areas like Dallas, Denver, Houston, Seattle and San Francisco, toward record levels."
Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to March 2015) was -11 percent. Excluding distressed transactions, the peak-to-current change for the same period was -6.7 percent. The peak-to-current declines were greatest in Nevada (-34.7 percent), Florida (-31.5 percent), Rhode Island (-29 percent), Arizona (-27.4 percent) and Connecticut (-25.5 percent).
Ninety of the top 100 Core Based Statistical Areas (CBSAs) measured by population showed year-over-year increases in March 2015. The 10 exceptions were the metropolitan areas that contain Baltimore, Philadelphia, Camden, New Jersey; Hartford, New Orleans, Rochester, Worcester, Massachusetts; Albany, New Haven, and Wilmington, Delaware.