The CoreLogic [1] Home Price Index (HPI) is still climbing, with single-family gains in April up nearly 2 percent over March numbers and 6 percent up from a year ago, according to the company’s latest HPI report [2].
In fact, the HPI shows home price gains hitting new month-to-month highs in 17 states, predominantly in the Midwest and West. Only Connecticut showed a drop in its HPI , down 0.5 percent in April.
Factoring in distressed sales, this latest HPI makes the 51st consecutive month-over-month increases in home values nationwide, though the national growth rate is no longer posting double-digits.
“Low mortgage rates and lean for-sale inventory have resulted in solid home-price growth in most markets,” said Frank Nothaft, CoreLogic’s chief economist. “An expected gradual rise in interest rates and more homes offered for sale are expected to moderate appreciation in the coming year.”
Five states, Nevada, Utah, Colorado, Oregon, and Washington, posted the largest increases in April and year-over-year. Oregon and Washington, in fact, each had more than 10 percent growth in both categories. And though Nevada’s HPI was up about 8 percent in both categories, it was one of five states‒‒also including Florida, Rhode Island, Arizona, and Maryland‒‒to remain furthest from its peak numbers. Nevada is still 33.5 percent lower than its pre-recession peak.
Also, while 17 states were in peak shape in April, the national HPI is still about 8 percent shy of peak values reported in 2006. At the going rate of increase, however, CoreLogic expects national housing prices to hit new peaks by September 2017.
That going rate is expected to remain strong, and CoreLogic predicts that May’s numbers will be nearly a full percent up from April’s and more than 5 percent up from last year’s figures.
The top 10 metro areas‒‒Boston, Chicago, Denver, Houston, Las Vegas, Los Angeles, Miami, San Diego, San Francisco, and Washington, D.C.‒‒ all reported increases in HPI in April, with Chicago and Las Vegas up most, by about 1.5 percent each. Year-over-year, Denver posted a 10 percent increase. CoreLogic expects Las Vegas and San Diego to post the most dramatic increases next year, with each market expected to be up more than 10 percent.
Overall, about 25 percent of the top 100 markets studied are believed to be at sustainable levels. On the flipside, 101 markets overall are considered overvalued, and 16 of those markets are in Texas.