Home Prices Stepped up Gains in July

Home prices nationally increased year-over-year at a faster pace in July than they did in June CoreLogic said on Tuesday.  The company's Home Price Index (HPI) which includes distressed properties rose 6.9 percent from a year earlier and were up 1.7 percent month over month.  June over June prices had increased by 6.5 percent although the monthly increase was also 1.7 percent.   

Colorado was the only state with an annual gain in double digits.  Prices there, including distressed sales, were up 10.4 percent.  Washington followed with a 9.9 percent gain along with Nevada (+9.1 percent), Hawaii (+8.9 percent) and Oregon (+8.8 percent). Five other states had price growth that exceeded the national average, Florida, New York, South Carolina, South Dakota, and Texas.  Only two states saw prices fall - Massachusetts was down 2.1 percent from July 2014 and Mississippi prices dipped 0.8 percent.

Fifteen states established new peaks in their HPI which includes data extending back to January 1976; Alaska, Arkansas, Colorado, Hawaii, Iowa, Kentucky, Montana, Nebraska, New York, North Carolina, North Dakota, Oklahoma, South Dakota, Tennessee and Texas.

"Home sales continued their brisk rebound in July and home prices reflected that, up 6.9 percent from a year ago," said Frank Nothaft, chief economist for CoreLogic. "Over the same period, the National Association of Realtors reported existing sales up 10 percent and the Census Bureau reported new home sales up 26 percent in July."

On the CoreLogic index that excludes distressed sales annual gains also accelerated from 6.4 percent from June 2014 to June 2015 to a 6.7 percent increase from July to July. The monthly increase was also slightly higher, 1.5 percent in July compared to 1.4 percent in June.

The difference between the two indices is narrowing and top states on the index excluding distressed sales differed little from the other index; Colorado (+10.1 percent), Washington (+9.5 percent), Nevada (+9.1 percent), Oregon (+9.1 percent) and New York (+9 percent).  Only West Virginia (-0.3 percent) and Vermont (-0.1 percent) showed year-over-year home price depreciation in July. Distressed sales include short sales and real estate-owned (REO) transactions.

Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, 95 showed year-over-year increases. The five CBSAs that showed year-over-year declines were: Baltimore (-0.3 percent); Boston (-3.8 percent); New Haven-Milford (-1.9 percent); New Orleans (-4.9 percent) and Worcester, Massachusetts (-7.2 percent).

Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to July 2015) was -6.6 percent. Excluding distressed transactions the change for the same period was -3.5 percent.

CoreLogic is predicting that home prices on its index including distressed sales will increase by 0.5 percent from July to August 2015 and by 4.7 percent from this past July to the next one.  Excluding distressed sales the projection is a 0.4 percent monthly gain and 4.6 percent for the 12 month period.  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.

"Low mortgage rates and stronger consumer confidence are supporting a resurgence in home sales of late," said Anand Nallathambi, president and CEO of CoreLogic. "Adding to overall housing demand is the benefit of a better labor market which has provided millennials the financial independence to form new households and escape ever rising rental costs."