Home Price Gains Slowed in May

Home prices increasesrndecelerated slightly on an annual basis in May compared to April according to arnreport from CoreLogic on Tuesday.  Therncompany’s Home Price Index (HPI) showed that home prices nationwide increasedrnby 6.3 percent in May.  The index, whichrnincludes sales of distressed properties, was rose 6.9 percent on an annualrnbasis in April.  It was the first monthrnthat annual appreciation has slowed since February but May still represented thern39^th consecutive month for year-over-year gains.  </p

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The HPI including distressed sales rose 1.7rnpercent from April 2015 to May 2015 enabling ten states.  (Alaska, Colorado, Iowa, Nebraska, New York,rnNorth Carolina, Oklahoma, Tennessee, Texas, and Vermont) and the District ofrnColumbia to establish new price peaks in CoreLogic’s records going back tornJanuary 1976.  Another 23 states are atrnor within 10 percent of their old peak prices. rnOn a national basis thernpeak-to-current change (from April 2006 to May 2015) was -8.4 percent. </p

The highest rates of annual price appreciationrnincluding distressed sales were in South Carolina (+10.3 percent), Colorado (+9.8rnpercent), Washington (+8.8 percent), Florida (+8.7 percent) and Nevada (+8.3rnpercent).  Five states experienced arndecline in value over the preceding year; Massachusetts (-4.8 percent),rnConnecticut (-1.8 percent), Maryland (-1.5 percent), Mississippi (-1.4 percent)rnand Louisiana (-0.8 percent). </p

A second HPI excluding distressed sales (REOrnand short sales) also rose 6.3 percent on an annual basis and was up 1.4rnpercent compared to the April number. rnTwo states depreciated on an annual basis, Massachusetts was down 2rnpercent and Louisiana 0.2 percent. Excludingrndistressed transactions, the peak-to-current change was -4.7 percent.</p

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Of the top 100 Core Based StatisticalrnAreas (CBSAs) measured by population, 92 showed year-over-year increases. Therneight CBSAs that showed year-over-year declines were: Baltimore (-1.8 percent);rnBoston (-4.8 percent); Bridgeport-Stamford-Norwalk (-0.32 percent);rnCambridge-Newton-Framingham, MA (-2.9 percent); Camden, NJ (-0.96 percent); NewrnOrleans (-6.4 percent); Silver Spring-Frederick-Rockville, MD (-0.31 percent)rnand Worcester, MA-CT (-6.6 percent).</p

“Mortgage rates on 30-yearrnfixed-rate loans remained below 4 percent through May, helping to fuelrnhome-purchase activity,” said Frank Nothaft, chief economist forrnCoreLogic. “Our homes-for-sale listing data shows that markets with highrndemand and limited supply, such as San Francisco, are recording double-digitrnappreciation rates over the past year.” </p

“The rate of home pricernappreciation ticked up in May with gains being fairly widely distributed acrossrnthe country. Importantly, higher home prices over the past couple of years havernspurred increases in new single-family construction,” said AnandrnNallathambi, president and CEO of CoreLogic. “Sales of newly built homesrnduring the first five months of 2015 were up 23 percent from a year ago, and asrnrising values build equity for homeowners, we expect to see more existing homesrnoffered for sale in the coming year.” </p

Looking forward CoreLogic projects anrn0.9 percent increase in its HPI including distressed sales from May to Junern2015 and a 5.1 percent annual gain from May 2015 to May 2016.  Excluding distressed sales, home prices arernprojected to increase by 0.8 percent on month over month basis and 4.7 percentrnyear over year.  The CoreLogic HPIrnForecast is a projection of home prices using the CoreLogic HPI and otherrneconomic variables.

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