Home prices nationwide, including distressed sales, increased by 5.6% in February 2015 compared to February 2014, but only 1.1% from January 2015 to February 2015, according to the latest report from CoreLogic (CLGX).
The yearly increase represents three years of consecutive year-over-year increases in home prices nationally. Meanwhile, wage growth has been stagnant for years, causing a great deal of concern among analysts.
"Since the second half of 2014, the dwindling supply of affordable inventory has led to stabilization in home price growth with a particular uptick in low-end home price growth over the last few months," said Frank Nothaft, chief economist for CoreLogic. "From February 2014 to February 2015, low-end home prices increased by 9.3% compared to 4.8% for high-end home prices, a gap that is three times the average historical difference."
Including distressed sales, 26 states and the District of Columbia were at or within 10% of their peak prices. Six states, including Colorado (+9.8%), New York (+8.2%), North Dakota (+7.7%), Texas (+8.5%), Wyoming (+8.4%) and Oklahoma (+5.2%), reached new home price highs since January 1976 when the CoreLogic HPI started.
Excluding distressed sales, home prices increased by 5.8% in February 2015 compared to February 2014 and increased by 1.5% month over month compared to January 2015. Also excluding distressed sales, all states and the District of Columbia showed year-over-year home price appreciation in February. 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 by 0.6% month over month from February 2015 to March 2015 and on a year-over-year basis by 5.1% from February 2015 to February 2016.
"In terms of home price appreciation, this has been the hottest spring in nine years," said Anand Nallathambi, president and CEO of CoreLogic. "Home prices have now increased for 39 straight months as improved housing market and macro-economic fundamentals and tight supplies combine to support the positive trend. Assuming a continued benign interest rate environment, we expect home prices to rise by an additional five% over the next twelve months."
The chart below shows February 2015 national and state HPI, ranked by single-family, including distressed sales.
Highlights as of February 2015:
- Including distressed sales, the five states with the highest home price appreciation were: Colorado (+9.8%), South Carolina (+9.3), Michigan (+8.5%), Texas (+8.5%) and Wyoming (+8.4%).
- Excluding distressed sales, the five states with the highest home price appreciation were: South Carolina (+9.7%), New York (+9.2%), Colorado (+9%), Texas (+7.9%) and Florida (+7.8%).
- Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to February 2015) was -12.2%. Excluding distressed transactions, the peak-to-current change for the same period was -7.8%.
- Including distressed sales, only Connecticut at -0.9% experienced a decline in home prices.
- The five states with the largest peak-to-current declines, including distressed transactions, were: Nevada (-35.4%), Florida (-32.4%), Rhode Island (-29.6%), Arizona (-28.4%) and Connecticut (-24.7%).
- Including distressed sales, the U.S. has experienced 36 consecutive months of year-over-year increases.
- Ninety-two of the top 100 Core Based Statistical Areas (CBSAs) measured by population showed year-over-year increases in January 2015. The eight CBSAs that showed year-over-year declines were: Baltimore-Columbia-Towson, MD; Philadelphia, PA; Hartford-West Hartford-East Hartford, CT; New Orleans-Metairie, LA; Rochester, NY; Worcester, MA-CT.; Albany-Schenectady-Troy, NY; and New Haven-Milford, CT.