IRVINE, Calif. (2/5/14)--U.S. house prices were up by 11% in 2013, according to data released Tuesday, but rising home values could slow this year due to a spike in construction over the past few months.
The CoreLogic Home Price Index revealed the 22nd consecutive month of year-over-year appreciation, while showing a less-than-expected 0.1% decline in the December measure--CoreLogic doesn't adjust for seasonal fluctuations, and the aggregate single-family index typically drops by more than 0.1% in winter months, according to Moody's (Economy.com Feb.4). Excluding distress sales, the December index increased by 0.2% on a monthly basis and 9.9% on a year-over-year basis.
Moody's said that strong demand since the middle of 2011 and lackluster construction activity throughout most of last year have driven home values up, but that a significant rise in housing starts in November and December should cause inflationary pressure on home prices to decelerate this year.
CoreLogic chief economist Mark Fleming echoed this assessment, saying that the firm expects "rising prices to attract more sellers, unlocking this pent-up supply, which will have a moderating effect on prices in 2014."
The latest CoreLogic data, including distress sales, shows that the company's home price index has risen 22% since bottoming out after the recession in March 2011, although it is below its April 2006 apex. The gauge excluding distress sales is 13.6% below its all-time high, also in April 2006, but is 18% higher than its most recent February 2012 low.
Prices including distress sales steadily increased throughout the country in 2013, with 95 out of the top 100 metropolitan areas by population showing year-over-year appreciations. Only three states saw home values drop last year--Arkansas, New Mexico and Mississippi saw depreciation of 1.5%, 1.3% and 0.2%.
States that saw the largest home price increases were Nevada, California and Michigan, at 23.9%, 19.7% and 14%. Oregon and Georgia also played host to large annual gains, at 13.7% and 12.8%. Metropolitan areas with the most rapid rise in home prices were Riverside, Calif., at 22%, and Los Angeles, at 19.1%. Atlanta, Phoenix and Chicago saw the next three most dramatic rises, at 15%, 13.9% and 12.5%.
CoreLogic is also predicting that home prices, including distress sales, increased in January by 10.2% on an annual basis and dropped by 0.8% on a monthly basis. Excluding distress sales, the measure is expected to have increased last month by 9.7% on a year-over-year basis and 0.2% on a monthly basis.