February home prices rose 6.1% nationwide year-over-year, according to data from Clear Capital.
Although current home prices have improved significantly over the last year, gains are expected to moderate over the short term, since this rate of growth is measured against lows in 2012.
“Consumer confidence continues to be vital to a broader housing recovery, and national quarterly home prices expanding 1% in the midst of winter is confirmation the recovery has legs,” said Alex Villacorta, director of research and analytics at Clear Capital.
Villacorta added, “While 1% is weaker in comparison to more recent rates of quarterly growth, the positive trend continues to support homebuyer confidence and is on par with the new normal.”
National and regional home price trends remained relatively unchanged in February. Quarterly growth nationwide was 1%.
These upward trends seem modest when compared to the aggressive appreciation seen during the run-up; however, they do impact consumer confidence.
Regionally, the West was the only region to post double-digit gains at 13.6%. The Midwest, Northeast and South saw 4%, 2.6% and 5.1% gains, respectively.
Twelve out of the 15 highest performing metro markets tracked by Clear Capital achieved double-digit year-over-year price gains, while all markets saw a gain of at least 8%.
Of the lowest performing major metro markets, 11 out of 15 saw slight quarterly declines. The declines in these markets were small, with nine of the 11 falling less than half a percent. Although minute, these drops are something to keep an eye on.
Overall though, the momentum seems to be building in the right direction. Recent updates on the regulatory front could contribute to this momentum as well.
“The Qualified Mortgage rule gives lenders more definition on extending credit to homebuyers, who continue to be encouraged by positive economic signs,” said Villacorta. “The real question now is how many of those sidelined borrowers will qualify for a loan under the new rules. All told, February’s home data shows the housing recovery is on track.”