While home prices continued increasing in August, their pace slowed. Here’s why it’s a good thing…
While 2013 was a year of continued turmoil for the nation’s housing market, this year is proving to be the industry’s growing period, in which, one by one, regional markets are finding their way back to a comfortable balance, according to the latest CoreLogic Home Price Index report.
In Chicagoland, growth has been consistent with home prices including distressed sales rising a modest 5.1 percent year-over-year, and, excluding distressed, 4.8 percent.
Statewide, gains have been slightly less marked, with prices including distressed rising 4.7 percent, and excluding distressed 3.8 percent.
More Good News
CoreLogic’s report went on to outline the national situation, as well, finding that:
- Overall average home prices, including distressed sales, have increased 6.4 percent year-over-year.
- August’s increases represent 30 consecutive months of year-over-year increases. However, national growth is no longer posting double-digit increases.
- Every state experienced year-over-year home price increases in August.
A Balancing Act
The increases in August mark yet another month of home prices increases, both including and excluding distressed sales. However, looking at the progress of previous months, the pace of growth is slowing considerable. But that’s not necessarily a bad thing, according to CoreLogic Chief Economist Mark Fleming.
“The pace of year-over-year appreciation continues to slow down as real estate markets find more balance,” he said. “Home price appreciation reached a peak of almost 12 percent year-over-year in October 2013 and has since subsided to the current pace of 6 percent.”
Fleming added that CoreLogic and the real estate industry as a whole should welcome the continued moderation of home price appreciation, saying that not only is it a sign of a balanced market, but it puts “less pressure on affordability for potential homebuyers in the near future.”
In the report, Anan Nallathambi, president and CEO of CoreLogic, mimics Fleming’s sentiments, saying that booming metropolitans like Los Angeles and Houston “continue to lead the way with strong price gains buoyed by tight supplies and a gradual rebound in economic activity.”