When it comes to home price appreciation, the days of double-digit, year-over-year increases appear to be behind us for now.
Home prices increased 1.4%, on average, in May compared to April and were up 8.8% compared to May 2013, according to CoreLogic's Home Price Index (HPI) report.
But the report shows that home price appreciation continued to flatten, as it had for the four previous months. What's more, the trend is spotty: Although all 50 states saw positive growth in May, some areas saw much more rapid home price appreciation than others.
Excluding distressed sales, home prices nationally increased 1.2%, compared to April, and were up 8.1% compared to May 2013.
Including distressed sales, states with the highest rates of home price appreciation, month over month, were Hawaii (+13.2%), California (+13.1%), Nevada (+12.6%), Michigan (+11.8%) and New York (+11.0%).
Excluding distressed sales, states with the highest home price appreciation were New York (+12.2%), Hawaii (+11.6%), Nevada (+10.6%), California (+10.4%) and Florida (+9.6%).
With distressed sales included, home prices as of May were -13.5% off from their peak in April 2006. Excluding distressed sales, home prices were off about -9.3% from their peak.
Including distressed sales, states with the largest peak-to-current declines in May were Nevada (-38.1%), Florida (-34.3%), Arizona (-29.2%), Rhode Island (-28.7%) and New Jersey (-23.0%).
As of May, the U.S. had experienced 27 consecutive months of year-over-year increases, including distressed sales.
CoreLogic forecasts that home prices, including distressed sales, will increase 0.8% from May to June. It predicts that home prices will rise about 6% overall this year.
Excluding distressed sales, home prices are expected to rise 0.7% month over month and by 5.1% for the year.
‘The pace of home price appreciation is cooling off quickly as the weather warms up,’ says Mark Fleming, chief economist for CoreLogic, in a release. ‘May's 8.8 percent year-over-year growth rate is down almost three percentage points from just three months ago. The influences of modestly rising inventory and less-than-expected demand are causing price growth to moderate toward our forecasted expectations.’
‘Home prices are continuing to climb across most of the country which has both positive and negative implications for the housing market,’ adds Anand Nallathambi, president and CEO of CoreLogic. ‘While the rapid rise in prices over the past two years has lifted many homeowners out of negative equity, it has also become a negative factor in buying decisions for prospective purchasers weighing affordability concerns. As we move ahead, a moderation in home price increases over the next twelve months should help cool things down a bit and keep the housing recovery going.’