Home prices nationwide, including distressed sales, increased 7.5 percent in June 2014 compared to June 2013 and rose 1 percent over May, setting new highs for 12 states. Despite low rates, investor purchases and tight supplies, prices are expected to slow down to a .07 percent monthly increase in July.
A total of 12 states, plus the District of Columbia, reached new highs in the Home Price Index dating back to January 1976 when the index started. These states are Alaska, Colorado, District of Columbia, Iowa, Louisiana, Nebraska, North Dakota, Oklahoma, South Dakota, Tennessee, Texas, Vermont and Wyoming. At the state level, including distressed sales, only Arkansas posted a decline in June 2014 with 0.4-percent depreciation, according to the June CoreLogic HPI Forecast.
Excluding distressed sales, home prices nationally increased 6.9 percent in June 2014 compared to June 2013 and 0.9 percent month over month compared to May 2014. Also excluding distressed sales, all 50 states and the District of Columbia showed year-over-year home price appreciation 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 0.7 percent month over month from June 2014 to July 2014 and, on a year-over-year basis, by 5.7 percent from June 2014 to June 2015. Excluding distressed sales, home prices are expected to rise 0.6 percent month over month from June 2014 to July 2014 and by 5 percent year over year from June 2014 to June 2015. The CoreLogic HPI Forecast is a monthly projection of home prices built 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.
“Home-price appreciation continued moderating in June with its slight month-over-month increase,” says Mark Fleming, chief economist for CoreLogic. “This reversion to normality that we are finally experiencing is expected to continue across the country and should further alleviate concern over diminishing affordability and the risk of another asset bubble.”
“Home prices are continuing to rise, fueled by ongoing tight supply, low rates and aggressive investor buying on the East and West Coasts,” says Anand Nallathambi, president and CEO of CoreLogic. “The expected surge in the number of homes for sale has not materialized to date as many homeowners are staying put and waiting for better economic times and higher prices in the future.”
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