U.S. Home Prices Rise 5.6 Percent Annually in September

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Based on CoreLogic's September 2014 CoreLogic Home Price Index (HPI) report, U.S. home prices nationwide, including distressed sales, increased 5.6 percent in September 2014 compared to September 2013. This change represents 31 months of consecutive year-over-year increases in home prices nationally. On a month-over-month basis, home prices nationwide, including distressed sales, dropped by 0.1 percent in September 2014 compared to August 2014.

At the state level, including distressed sales, all states showed year-over-year home price appreciation in September. Two of those states, Michigan and Montana, showed double-digit year-over-year growth. Twenty-eight states and the District of Columbia were at or within 10 percent of their home price peak. The HPI reached new highs in a total of five states: Colorado, Nebraska, North Dakota, South Dakota and Texas.

Excluding distressed sales, home prices nationally increased 5.2 percent in September 2014 compared to September 2013 and 0.1 percent month over month compared to August 2014. Also excluding distressed sales, 49 states and the District of Columbia showed year-over-year home price appreciation in August, with Mississippi being the only state to experience a year-over-year decline (-0.9 percent). Distressed sales include short sales and real estate owned (REO) transactions.

The CoreLogic HPI Forecast indicates that home prices, including distressed sales, are projected to increase 0.1 percent month over month from September 2014 to October 2014 and, on a year-over-year basis, by 5 percent from September 2014 to September 2015. Excluding distressed sales, home prices are expected to rise 0.1 percent month over month from September 2014 to October 2014 and by 4.6 percent year over year from September 2014 to September 2015. The CoreLogic HPI Forecast is a monthly projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

"There has been a clear bifurcation in home price growth for lower-end versus upper-end properties in 2014," said Sam Khater, deputy chief economist at CoreLogic. "As of December 2013, both lower-end and upper-end property prices were up 9.7 percent on a year over year basis. As of September, lower-end prices were up 9.4 percent but upper-end prices were up only 4.5 percent."

"Home prices continue to rise compared with this time last year but the rate of growth is clearly slowing as we exit 2014," said Anand Nallathambi, president and CEO of CoreLogic. "With more positive macro-economic trends emerging in the U.S., we are forecasting moderate price growth for 2015."

Highlights as of September 2014:

• Including distressed sales, the five states with the highest home price appreciation were: Michigan (+10.3 percent), Montana (+10 percent), Maine (+9.6 percent), Massachusetts (+8.8 percent) and California (+8.5 percent).

• Excluding distressed sales, the five states with the highest home price appreciation were: Maine (+10.4 percent), Massachusetts (+9.7 percent), California (+7.6 percent), Texas (+7.4 percent) and Michigan (+7.2 percent).

• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to September 2014) was -12.6 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -9.1 percent.

• The five states with the largest peak-to-current declines, including distressed transactions, were: Nevada (-36.6 percent), Florida (-34.1 percent), Arizona (-29.6 percent), Rhode Island (-27.9 percent) and Maryland (-21.2 percent).

• Including distressed sales, the U.S. has experienced 31 consecutive months of year-over-year increases; however, the national average is no longer posting double-digit increases.

• Ninety-six of the top 100 Core Based Statistical Areas (CBSAs) measured by population showed year-over-year increases in September 2014. The four CBSAs that did not show an increase were Rochester, N.Y.; Little Rock-North Little Rock-Conway, Ark.; New Haven-Milford, Conn. and Hartford-West Hartford-East Hartford, Conn.