Home data reports from both CoreLogic (CLGX) and Clear Capital released Tuesday project continued home price growth, despite the recent increase in mortgage rates.
According to the CoreLogic report, home prices throughout the country rose 12.4% year-over-year in July, marking the 17th consecutive month of annual growth in home prices. Clear Capital’s report posted a 10.2% increase in home prices year-over-year; however, this report was for August, not July.
Nonetheless, both reports point toward strong home price appreciation. According to Clear Capital, the last time double-digit yearly price growth was reported was mid-2006, the height of the bubble.
On a monthly basis, home prices, including distressed sales, increased by 1.8% in July, CoreLogic reported. In its home price index, CoreLogic analysts predict that home prices will rise by 12.3% year-over-year in August, with a 0.4% monthly increase — implying a slowing in price gains.
"Home prices continued to surge in July,” said Mark Fleming, chief economist for CoreLogic. "Looking ahead to the second half of the year, price growth is expected to slow as seasonal demand wanes and higher mortgage rates have a marginal impact on home purchase demand."
Clear Capital’s August report claimed the low-tier price segment of the housing market posted a quarterly gain of 2.0%, the lowest since April 2012. This indicates the sector that kickstarted the recovery is already starting to see moderation in its prices.
"Considering the low tier price segment of the housing market led the recovery, the cooling in this segment will likely transfer through to the broader housing market," said Alex Villacorta, vice president of research and analytics at Clear Capital.
"And cyclically, we are heading out of the busy buying season and into the slower fall and winter months. That’s not to say the recovery is slated to stall, rather growth patterns are likely to return to more historical rates of growth, between 4.0% to 5.0%, rather than align with bubble-like growth," he added.