IRVINE, Calif. (1/8/14)--A prominent research firm's latest monthly report indicates that American homes appreciated in value last year at the fastest annual rate in eight years.
The U.S. CoreLogic Home Price Index was up in November by 0.1% on a monthly basis and 11.8% on a year-over-year basis. The research firm's Tuesday report also forecast a 0.1% monthly decline and a 11.5% annual growth rate in December--a development that would make 2013 the best year for home price growth acceleration since 2005.
The growth in November, the 21st consecutive monthly year-over-year-increase, leaves the index 17.6% below its April 2006 peak--an indication that homes have recovered half their value since 2011, when the index bottomed out at 32% below the previous fulcrum (Economy.com Jan. 7)
The real-estate appreciation appears to be nationwide, with only one state—Arkansas--showing a year-over-year decrease in November at -1.1%. Nevada, California, Michigan and Arizona saw the largest annual increases at 25.3%, 21.3%, 14.4%, and 13.5%. Of the top 100 metropolitan areas measured by CoreLogic, 96 saw annual increases, with Riverside, Calif., Los Angeles, Atlanta, Phoenix and Chicago leading the nation at 23.2%, 20.7%, 15.7%, 14.7% and 12.4%. Home prices are now at new peaks or within 10% of previous peaks in 21 states and Washington, D.C. (USA TODAY Jan. 7).
Moody's analysts said that home prices will decelerate for a number of reasons. Existing single family home sales have fallen since August, and construction has picked up in recent months. Meanwhile, investor purchases have slowed, while mortgage interest rates have steadily increased--a trend that looks set to continue with the Federal Reserve having this month launched its $10 billion tapering of the formerly $85 billion monthly quantitative easing program.
The ratings and research firm said that the housing recovery should continue on the whole in 2014, with residential construction relatively modest compared to last decade's bubble and mortgage lenders able to loosen self-imposed tight credit requirements.
New federal mortgage market regulations could, however, act as a damper on home value growth, according to USA TODAY.