CoreLogic: Home prices continue to moderate
Acceleration unlikely to sustain into 2015
Home prices nationwide, including distressed sales, increased 5.5% in November 2014 compared to November 2013, marking 33 months of straight year-over-year increases in home prices, the newest CoreLogic (CLGX) home price index found.
On a month basis, home prices, including distressed sales, edged slightly higher, increasing by 0.1% in November 2014 compared to October 2014.
“It is too soon to tell whether the slight moderation in the month-on-month rate of house price inflation in November is the first sign that price pressures are coming off the boil again. Regardless, the bigger picture is that the recent acceleration in house prices is unlikely to be sustained into 2015,” a Capital Economics report said on the home price index.
The increases in home prices trickled down to the state. Including distressed sales, all states and the District of Columbia showed year-over-year home price appreciation in November
Twenty-nine states are at or within 10% of their peak, and seven states reached new highs in the home price index (since January 1976 when the index starts). These states were: Colorado, North Dakota, Oklahoma, South Dakota, Tennessee, Texas and Wyoming.
Excluding distressed sales, home prices nationally increased 5.3% in November 2014 compared to November 2013 and 0.3% month over month compared to October 2014.
Even with excluding distressed sales, all states and the District of Columbia showed year-over-year home price appreciation in November.
“After decelerating for most of the year, home price growth has been holding firm between a 5- percent and 6-percent growth rate for the last four months,” said Sam Khater, deputy chief economist at CoreLogic.
“However, pockets of weakness are clear in Baltimore and Washington D.C., and three of the top four states with the highest price appreciation are energy intensive and had been benefitting from the energy boom which is currently receding as oil prices trend downward. These states—Texas, Colorado and North Dakota, may see some downward pressure on prices in 2015,” said Khater.
Looking ahead, CoreLogic HPI forecasts that home prices, including distressed sales, are projected to decrease 0.1% month over month from November 2014 to December 2014 and increase, on a year-over-year basis, by 4.6% from November 2014 to November 2015.
Excluding distressed sales, home prices are also expected to decrease by 0.1% month over month from November 2014 to December 2014 and increase by 4.2% year over year from November 2014 to November 2015.
“The pace of home price gains have slowed as we exit 2014 but this is probably only a temporary lull,” said Anand Nallathambi, president and CEO of CoreLogic. “While the CoreLogic HPI Forecast shows a slight dip in prices next month, we believe that prices will be up a year from now as continued economic growth fuels buyer confidence and their willingness to purchase a home and invest in their future.”