December 3rd, 2013
Both average home prices and sales increased in October, according to CoreLogic.
The real estate analysis company’s Home Price Index, which measures price appreciation across 640 core-based statistical areas, increased only 0.2 percent in October on a month-to-month basis when compared to September. This gain appears minimal when compared with the 2 percent monthly gains seen in the spring, but it represents the biggest monthly gain for October since 2006.
“In terms of home price appreciation, the housing market appears to be catching its breath as we head into the final months of 2013,” said Anand Nallathambi, president and CEO of CoreLogic. “The deceleration in month-on-month trends was anticipated as strong gains in home prices over the spring and summer slow in line with normal seasonal patterns and the impact of higher mortgage interest rates.”
Despite slow monthly gains, the annual HPI was much stronger. CoreLogic reported a 12.5 percent increase in home prices in October when compared to the previous year. Without factoring in sales of distressed homes, the rise was only 11 percent, further evidence for the attribution of price appreciation to a shortage of available homes.
The highest annual price increase was seen in Nevada - 25.9 percent over October 2012. California ranked second with 22.4 percent growth, followed by Georgia, taking the third spot with 14.2 percent appreciation. Even though Nevada led the pack on this HPI, the gains were still 40.7 percent short of the state’s 2006 peak. Georgia was within two percentage points of its peak for the past 35 years.
Strength in sales
CoreLogic also reported that home sales rose 10 percent annually in October.
This increase was a climb to a seasonally adjusted sales pace of 5.2 million homes and is part of a 22-month trend of sales gains, indicating continued recovery of the housing market. Home resales were the biggest contributor to sales growth, increasing 21 percent. New home sales rose 8 percent.
The sale of Real-estate owned homes dropped 22 percent, and short sales declined 27 percent.
Sales of distressed homes were only responsible for 15 percent of total sales in October, the lowest proportion since February 2008. In 2012, distressed sales accounted for 21.8 percent of total sales. The highest number of distressed sales came from Nevada, which saw a 33.8 percent annual increase.