A week after the S&P Case Shiller Home Price Indices reported home prices rose by more than 10 percent for the year ending in March, another report says home prices are up 12 percent on the year ending in April.
By next month, the rate of increase could be 13 percent.
The 12.1 percent jump is the largest year-over-year increase since February 2006 and the 14th consecutive monthly increase in home prices nationally, according to CoreLogic, the residential real estate market monitor that released the latest report.
What's more, the 12.1 percent increase includes distressed homes indicating few bargains may be left in the foreclosure and short sale markets. Distressed homes typically sell for less, but their prices are rising fast, too.
In fact, home prices on distressed sales may be increasing at a faster rate than the market overall. CoreLogic said excluding distressed sales, home prices increased by only 11.9 percent year over year and 3 percent for the month.
On a month-to-month, basis, all home prices, including distressed sales, were up 3.2 percent, moving light years faster than the economy at large.
Analysis by Capital Economics (CE) says there's little to suggest the pace of home price gains will slow at least through most of the summer.
And, if CoreLogic's Pending Home Price Index for home prices rises by 2.7 percent as forecast for May, the annual rate of home price inflation is on track to accelerate to 12.5 percent.
Take away distressed sales and the May forecast is for another 3.1 month to month increase and an even larger 13.2 percent annual increase, according to CoreLogic.
"House price growth continues to surprise to the upside with an impressive 12.1 percent gain year over year in April," said Dr. Mark Fleming, chief economist for CoreLogic.
"Increasing demand for new and existing homes, coupled with low inventory, has created a virtuous cycle for price gains, most clearly seen in the Western states with year-over-year gains of 20 percent or more," Fleming added.
CE reported the lack of inventory continues to pressure prices to rise. The 4.8 month supply of homes for sale is at an all time low.
However, CE also recently reported the inventory problem has begun to ease with a sharp rise in home listings since the beginning of the year.
CE also cautioned against home price exuberance.
Home prices in the U.S. remain more than 20 percent below peak levels set back during the boom. However, a week ago, that number was 25 percent as more and more metros return to and surpass record high home prices.
CoreLogic says, including distressed sales, the five states with the highest home price appreciation were Nevada, 24.6 percent; California, 19.4 percent; Arizona 17.3 percent; Hawaii, 17 percent and Oregon, 15.5 percent.
Excluding distressed sales, the five states with the highest home price appreciation were Nevada, 22.6 percent; California, 18.3 percent; Idaho, 16.4 percent; Arizona, 15.3 percent and Washington, 13.9 percent.
Published: June 7, 2013
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