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CoreLogic: Home Prices Show Biggest Increase since 2006

Sorohan, Mike
CoreLogic, Irvine, Calif., said home prices rose by 8.3 percent in December, the 10th consecutive monthly increase and the biggest year-over-year increase since May 2006.

The Home Price Index report said on a month-over-month basis, home prices increased by 0.4 percent in December from November. All but four states saw year-over-year price gains.

“We are heading into 2013 with home prices on the rebound,” said Anand Nallathambi, president and CEO of CoreLogic. “The upward trend in home prices in 2012 was broad based with 46 of 50 states registering gains for the year. All signals point to a continued improvement in the fundamentals underpinning the U.S. housing market recovery.”

The report said excluding distressed sales, home prices increased on a year-over-year basis by 7.5 percent in December from a year ago. On a month-over-month basis, excluding distressed sales, home prices increased by 0.9 percent in December from November.

Including distressed sales, states with the highest home price appreciation were Arizona (+20.2 percent), Nevada (+15.3 percent), Idaho (+14.6 percent), California (+12.6 percent) and Hawaii (+12.5 percent). Only four states posted home price depreciation: Delaware (-3.4 percent), Illinois (-2.7 percent), New Jersey (-0.9 percent) and Pennsylvania (-0.5 percent).

Excluding distressed sales, states with the highest home price appreciation were Arizona (+16.4 percent), Nevada (+14.7 percent), California (+12.8 percent), Hawaii (+11.7 percent) and North Dakota (+10.8 percent). Only three states posted home price depreciation: Delaware (-1.9 percent), Alabama (-1.0 percent) and New Jersey (-0.5 percent).

Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to December 2012) was -26.9 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -20.8 percent. States with the largest peak-to-current declines, including distressed transactions, were Nevada (-52.4 percent), Florida (-43.5 percent), Arizona (-39.8 percent), Michigan (-36.5 percent) and California (-35.4 percent). Of the top 100 Core Based Statistical Areas measured by population, only 16 showed year-over-year declines in December, two fewer than in November. 

Looking ahead, the CoreLogic Pending HPI suggested that January home prices, including distressed sales, are expected to rise by 7.9 percent on a year-over-year basis from January 2012 and fall by 1 percent on a month-over-month basis from December, reflecting a seasonal winter slowdown. Excluding distressed sales, January 2013 house prices are poised to rise 8.6 percent year over year from January 2012 and by 0.7 percent month over month from December 2012.

Also yesterday, the Institute for Supply Management, Tempe, Ariz., said its Non-Manufacturing Index retreated slightly in January, dropping to 55.2 from December’s 56.1. Over the past year, the index has averaged 55.0.

John Silvia, chief economist with Wells Fargo Securities, Charlotte, N.C., said the markets remain somewhat neutral. “If there is anything surprising in recent ISM non-manufacturing surveys, it is that we have seen little evidence of a response to the uncertainty and frustration over the fiscal cliff and debt ceiling that has been so easy to identify in other reports,” he said.

Silvia said underlying details, however, suggests a “fair amount of volatility” in subcomponents of the index. “The slow growth economy trudges on, the job market continues to heal and exports may help offset a weak domestic business spending environment,” he said.