WASHINGTON (10/7/15)--Home prices rose 1.2% in August and 6.9% on a year-over-year basis, according to numbers released Tuesday by CoreLogic (Economy.com Oct. 6).
The monthly increase marked the eighth straight month of home-price appreciation, though prices remained 5% lower than their peak levels set in April 2006.
“Slowly but surely, the U.S. housing market is gaining traction,” said Kwame Donaldson, Moody’s analyst (Economy.com). “Combined sales of single-family and condo/co-op homes exceeded 6 million annualized in July, the highest level since 2007. Inventory-to-sales ratios for existing single-family and condo/co-op homes are at 4.5 months of sales, the lowest ratios since 2005, while the inventory-to-sales ratio for new homes is not much higher.”
House prices in 12 states climbed to record highs in August, and only Mississippi recorded home prices that fell on a year-over-year basis, according to CoreLogic.
Home prices in Nevada, Florida, Arizona and Rhode Island also continued to struggle, with prices that remained more than 20% below their peak values.
Still, Donaldson said there is cause for optimism.
“The primary drivers for continued house-price growth remain in place,” Donaldson said. “The labor market will tighten into 2016, and wage growth will heat up as demand for skilled workers rises, in turn boosting housing demand and house prices. Mortgage credit will also become more freely available as banks seek to boost revenues and household balance sheets mend further, thanks to rising home values.”