By Mike Colpitts
In a sign the U.S. housing market is improving, home prices rose on a year over year basis slightly more than 1% on average through April, according to real estate research firm CoreLogic. The company released the report on its monthly Home Price Index today.
It was the second straight year over year increase this year, and the first time home prices have shown an increase in the company’s index since June 2010. The average home price rose 1.1% for 2012, according to the study which covers 100 major U.S. housing markets composing the nation’s largest populated cities.
On a month over month basis housing prices, including distressed sales, which are bank assisted short sales and foreclosures jumped 2.2% in April. Almost half of all home sales in the country are distress sales. It was the second consecutive monthly increase this year.
A tighter inventory of homes to choose from in many regions of the nation is pressuring home prices as record low mortgage rates push more buyers into the marketplace. “Excluding distressed sales, home prices in March and April are improving at a rate not seen since late 2006 and appreciating at a faster rate than during the tax credit boom-let in 2010,” said CoreLogic chief economist Mark Fleming.
The supply of homes for consumers to choose from is down to an average of 6.5 months in the U.S., which hasn’t been seen in five years. Freddie Mac and Fannie Mae are holding a large inventory of homes off the market and many banks and mortgage companies are doing the same in hopes of selling them at higher prices.
CoreLogic provides real estate analytics to the financial services and real estate industry, and its index tracks home sales and prices monthly.“We see the consistent month-over-month increases within our HPI and Pending HPI as one sign that the housing market is stabilizing,” said Anand Nallathambi, president and chief executive officer of CoreLogic. “Home prices are responding to a restricted supply that will likely exist for some time to come—an optimistic sign for the future of our industry.”
The five states with the highest appreciation levels on a year over year basis are led by Arizona at 8.8%, the District of Columbia (6.4%), Florida (5.5%), Montana (5.4%) and Utah (5.4%), according to CoreLogic.
But many of the nation’s hardest hit states are still reeling in massively declining home values. Delaware home values have fallen an average of 11.9% for the year, followed by Illinois (-6.8%), Alabama (-6.6%), Rhode Island(-6.2%) and Georgia (-5.6%).