CoreLogic reported today that its repeat-sales Home Price Index (HPI), based on sale prices for the same homes over time, posted a 10.5% year-over-year gain in March (including distressed sales). That was the largest annual increase in home prices since March 2006 00 six years ago (see blue line on chart below). March was the 13th consecutive month starting last March that national home prices increased year over year. The last time there were 13 back-to-back monthly increases in year-over-year home prices was in 2005-06. Excluding distressed sales, CoreLogic reported that national home prices increased annually by 10.7% in March (see red line on chart), the largest annual home price appreciation since February 2006. March was the first month since March 2006, six years ago, that both CoreLogic home price indexes posted annual gains above 10%.
At the state level, there were 11 states that posted double-digit gains in February home prices: Nevada (22.2%), California (17.2%), Arizona (16.8%), Idaho (14.5%), Oregon (14.3%), Hawaii (13.4%), Georgia (12.1%), Washington (11.6%), Utah (11.5%), Colorado (10.4%), and Massachusetts (10.4%). Only four states posted annual declines in home prices: Delaware (-3.7%), Alabama (-3.1%), Illinois (-1.8%), and West Virginia (-0.3%).
Looking forward one month, the CoreLogic Pending Home Price Index predicts April home prices (excluding distressed sales) will increase by 12% compared to a year ago, which would be the largest annual gain in home prices since January 2006. Including distressed sales, home prices in April are expected to increase by 9.6%. Dr. Mark Fleming, chief economist for CoreLogic, commented that "for the first time since March 2006, both the overall index and the index that excludes distressed sales are above 10% year over year. The pace of appreciation has been accelerating throughout 2012 and so far in 2013 leading into the home buying season."
For many months now, almost every new report on the U.S. housing sector is showing signs of significant improvement. The case for a robust housing recovery keeps getting stronger. Today's CoreLogic report of double-digit year-over-year gains for both of its home price indexes for the first time in six years is a major milestone in the housing recovery that started last year.
Looking ahead, the shortage of housing inventory in many parts of the country is one factor that could slow the pace of home sales somewhat, but on the other hand will contribute to continuing gains in home price appreciation. Overall, there's no question that housing market fundamentals are solid and improving. We can expect 2013 to be another good year for the U.S. housing market as we now move into the peak season with mortgage rates at record-low levels.