U.S. home prices increased 1.8% in July compared to June, and are up a whopping 12.4% compared to July 2012, according to CoreLogic's Home Price Index (HPI) report.
July marked the seventh consecutive month that home prices increased, according to the report.
The rise in home prices has been a good thing for homeowners who are underwater on their mortgages, as it helps bring them toward positive equity. However, the trend has been bad for many home buyers – in particular first-time home buyers – as rising prices, combined with increasing interest rates and tightening credit, has bumped a lot of potential buyers out of the market.
Excluding distressed sales (short sales and real estate owned transactions), home prices increased 1.7% in July compared to June, and increased by 11.4% compared to July 2012.
The trend, however, is expected to moderate. CoreLogic is forecasting that August home prices, including distressed sales, will rise by only 0.4% on a month-over-month basis from July, and by 12.3% on a year-over-year basis from August 2012. Excluding distressed sales, August home prices are forecast to rise 1.2%, month-over-month, and 12.2%, year-over-year.
‘Looking ahead to the second half of the year, price growth is expected to slow as seasonal demand wanes and higher mortgage rates have a marginal impact on home purchase demand,’ says Dr. Mark Fleming, chief economist for CoreLogic, in a release.
Anand Nallathambi, president and CEO of CoreLogic, noted ‘home prices are now within 18 percent of their peak levels reached in April of 2006.’
Including distressed sales, the five states with the highest home price appreciation in July were Nevada (27%), California (23.2%), Arizona (17%), Wyoming (16.4%) and Oregon (15%). Only one state posted home price depreciation: Delaware (down 1.3%).
Excluding distressed sales, the five states with the highest home price appreciation were Nevada (24.2%), California (20.2%), Arizona (14.9%), Utah (13.5%) and Florida (13.5%).
To view the full report, click here.