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CoreLogic: Year-Over-Year Home Prices Rise Most Since 2006
Today CoreLogic released its Home Price Index for July. Home prices rose significantly, rising 3.8 percent year-over-year, the largest annual increase since 2006. When excluding distressed home sales, prices were up 4.3% annually. On a monthly basis, prices were up 1.3%. Mark Fleming, chief economist for CoreLogic commented:
“The housing market continues its positive trajectory with significant price gains in July and our expectation of a further increase in August. While the pace of growth is moderating as we transition to the off-season for home buying, we expect a positive gain in price levels for the full year.”
I believe that every major home price index has now turned positive on both a month-over-month and year-over-year basis. I believe that much of this is the result of an artificial constraint on housing supply. I don’t see a lot in the underlying economic numbers that would lead me to believe we are close to a housing rebound (I’m willing to concede that some areas have likely bottomed). Here’s a couple things to bear in mind:
- Unemployment is still more or less where it has been for about a year.
- The student debt burden is rising to record levels, and presents a drag on housing and household formation.
- The U.S. economy appears to be slowing.
- Mortgage rates are close to a full point better than last year, but a large increase in purchasing power has only lead to a marginal increase in prices.
- More than $700 billion in negative equity in the housing market still presents a huge market clearing problem.
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2012-09-10 02:05:04
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