Home Prices Inch Higher in August

Black Knight Financial Services' Data and Analytics division released its August 2015 Home Price Index (HPI) report, finding that U.S. home prices were up 0.3 percent in  August and up 5.5 percent year-over-year.

Many in the mortgage industry credit low mortgage rates, increased demand, and employment growth as the driving factors of the rise in home prices.

The HPI reached $253,000 in August and is now just 5.3 percent off its June 2006 peak of $268,000. In addition, the HPI is up over 27 percent from the market's bottom in January 2012.

Leading the gains among the states is New York with 1.8 percent month-over-month home price increase. Wrapping up the top five states with the largest monthly HPI changes are New Hampshire (0.7 percent); Texas (0.7 percent); Nevada (0.6 percent); and Florida (0.6 percent).

A total of nine states endured negative home price appreciation including Illinois (-0.5 percent); Virginia (-0.4 percent); Rhode Island (-0.3 percent); Missouri (-0.2 percent); Connecticut (-0.2 percent); Indiana (-0.2 percent); Minnesota (-0.2 percent); Ohio (-0.1 percent); and Iowa (-0.1 percent). The state of Georgia experienced no home price change.

Cities in New York held all positions in the top 10 biggest movers with the highest home price changes led by Utica, Glens Falls, and Watertown at 1.9 percent in August.  Other cities included Binghamton, Syracuse, Ithaca , Kingston, Elmira, Rochester, and Buffalo.

Illinois held seven of the 10 worst performing metro areas, with home prices in
Decatur, Peoria, Kankakee and Springfield all falling by 0.9 percent from July.

Home prices in New York ($358,000), Tennessee ($177,000) and Texas ($215,000) all hit new peaks again in August, according to Black Knight.

Yesterday, the Federal Housing Finance Agency reported similar findings among home prices as they appeared to be losing some of their spark, slowing down to a marginal increase of 0.3 percent on a seasonally adjusted basis in August compared to the previous month.

The 0.6 percent increase originally recorded in July was downwardly revised to 0.5 percent, FHFA reported in their monthly Home Price Index (HPI), which is gathered from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.

Earlier in this month, CoreLogic reported a very different view on home prices with a much large increase in August.

Employment gains, wage growth, and continued low mortgage rates are pushing home prices up both year-over-year and month-over-month.

CoreLogic's U.S. Home Price Insights Report told a different story earlier this month as employment gains, wage growth, and continued low mortgage rates are pushing home prices up both year-over-year and month-over-month.

Home prices recorded a 6.9 percent year-over-year gain for the single-family combined tier, including distressed sales,found. This will mark the 42nd consecutive month of year-over-year increases. Meanwhile, on a month-over-month basis, home prices rose 1.2 percent.

“Economic forecasts generally project higher mortgage rates and more single-family housing starts for 2016. These forces should dampen demand and augment supply, leading to a moderation in home price growth,” said Frank Nothaft, chief economist for CoreLogic.

Anand Nallathambi, president and CEO of CoreLogic said "continued gains in employment, wage growth and historically low mortgage rates are bolstering home sales and home price gains. In addition, an increasing number of major metropolitan areas are experiencing ever-more severe shortfalls in affordable housing due to supply constraints and higher rental costs. These factors will likely support continued home price appreciation in 2016 and possibly beyond.”

Click here to view Black Knight's full report.