March represents another month of home price appreciation, according to CoreLogic.
CoreLogic released its March Home Price Index (HPI) today, and the findings reflected a continued strengthening of prices nationwide.
Including distressed sales, national home prices rose 5.9 percent in March from the same time last year, marking 37 months of consecutive growth; excluding distressed, prices increased 6.1 percent. As we enter spring, strong price appreciation should continue.
Reflecting modest demand, Chicago home prices, including distressed, rose 3.3 percent year-over-year – well below national gains – and excluding distressed, 5.2 percent, which marks a significant shedding of foreclosures and short sales. Statewide, increases ran along similar lines, with prices including distressed rising 2.7 percent, and excluding, 4.5 percent.
Price appreciation continues to chug along a steady track, which suggests a more sustainable rate of increase and, ultimately, a return to a balanced market. Chicago is still dealing with low construction and inventory, but steady price growth is a positive sign for the market.
Regional Diversity, National Uniformity
Boiling down figures to regional and metro-specific areas, CoreLogic’s report showed diversity amongst market performances. But from a national perspective, gains were considerably widespread.
- Including distressed sales, the five states with the highest home price appreciation were: Colorado (+9.2 percent), South Carolina (+9.1 percent), Kansas (+8 percent), Texas (+8 percent) and Nevada (+7.6 percent).
- Excluding distressed sales, the five states with the highest home price appreciation were: Kansas (+9.5 percent), Colorado (+8.5 percent), South Carolina (+8.2 percent), Florida (+7.9 percent) and Texas (+7.6 percent).
- Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to March 2015) was -11 percent. Excluding distressed transactions, the peak-to-current change for the same period was -6.7 percent.
The Significance of Inventory
In a statement accompanying CoreLogic’s report, Chief Economist Frank Nothaft explained the national surge in home prices, attributing growth to a coupling of low inventory and mortgage rates, and improving consumer confidence.
“As a result,” he added, “there has been continued upward pressure on prices in most markets, with our national monthly index up 2 percent for March 2015 and up approximately 6 percent from a year ago.”
The group’s president and CEO, Anand Nallathambi, said that all indicators suggest a strong 2015.
“In fact, the strong month-over-month gain in March may be a harbinger of accelerating price appreciation as we enter the spring selling season,” he mused.
Mimicking the words of Nothaft, CoreLogic’s chief executive cited inventories as a key driver of price appreciation, as well as making special mention of the important roles job growth and demographics play in escalating price levels.
According to CoreLogic’s projections, prices are on track to appreciate by 5.1 percent over the next 12 months.