Home prices in July rose 3.8% over last year, making it the largest annual gain in six years, CoreLogic (CLGX) said in its latest Home Price Index Tuesday.

The Santa Ana, Calif.-based mortgage research and analytics firm noted that home prices, including distressed sales, edged up 1.3% from June, making it the fifth consecutive month-over-month increase in home prices nationally.

When excluding distressed home sales, which are known to skew price levels, home prices grew 4.3% over last year in July and 1.7% over June, suggesting a value recovery is taking hold.

CoreLogic's pending home price index suggests that August prices, including distressed sales, will rise at least 4.6% year-over-year this month.

When excluding the influence of distressed sales, CoreLogic believes August home prices will rise 6% over last year and 1.3% over July.


"The housing market continues its positive trajectory with significant price gains in July and our expectation of a further increase in August," said Mark Fleming, chief economist for CoreLogic.

The five states with the highest price appreciation, including distressed sales, were Arizona (with prices rising 16.6%); Idaho (prices up 10%); Utah (values up 9.3%); South Dakota (prices up 8.3%); and Colorado (prices up 7.3%).

The states with the most price depreciation, including distressed sales, were Delaware (-4.8%); Alabama (-4.6%); Rhode Island (-2.2%); Connecticut (-1.7%); and Illinois (-1.7%).