By Peter Ricci
Home prices rose 6.3 percent year-over-year in October according to the latest Home Price Index from CoreLogic, which is the biggest yearly increase since June 2006 and the eighth consecutive month of yearly increases. This is the second week in a row of solid news on the home price front, with last week’s Case-Shiller all but making the housing recovery official.
On a monthly basis, the Home Price Index did decline a tad, falling 0.2 percent from September to October. Such a decrease, though, was expected, given that housing activity generally slows from the summer to the fall.
Home Price Index – Prices Strengthening Nationwide
The aforementioned 6.3 percent increase for the Home Price Index included distressed sales, and when distressed sales are excluded, the portrait changes somewhat:
- Excluding distressed sales, the Home Price Index increased 5.8 percent year-over-year in October, a slight decline from when distressed sales are included.
- On a monthly basis, though, the lack of distressed sales reflected quite well for the index, with prices rising 0.5 percent from September to October.
- The Pending Home Price Index, which anticipates where home prices will fall in CoreLogic’s next report, was extremely optimistic for November; whether distressed sales are included or not, CoreLogic is expecting a yearly increase of at least 7 percent for home prices, and excluding distressed sales, another 0.5 percent monthly increase.
- Anand Nallathambi, the president and CEO of CoreLogic, credited low housing inventories and heightened buyer demand for the increase, which is consistent with our analysis from last week.
George Schultz, the managing broker for @properties’ in Bucktown, said that he has definitely seen stabilization in Chicago’s real estate market, with more inventory moving off the shelf. And given how prices have trended downwards in recent months, he’s sees them increasing in the future.
“Prices have nowhere else to go but up,” he said.
Mark Fleming – Housing Recovery Gaining “Momentum”
Mark Fleming, the chief economist for CoreLogic, said that the latest Home Price Index is proof that the housing recovery is not only gaining momentum, but also spreading across the U.S.
“The housing recovery that started earlier in 2012 continues to gain momentum,” Fleming said. “The recovery is geographically broad-based with almost all markets experiencing some appreciation. Sand and energy states continue to experience the most robust appreciation and some judicial foreclosure states are even recording increasing prices.”