Tuesday, August 07, 2012

CoreLogic Home Price Indexes Increase in June for 4th/5th Month, With Highest Yearly Gains in 6 Yrs.


CoreLogic released its monthly report today on June home prices based on its Home Price Index (HPI), along with its new Pending HPI for July, with these highlights:

1. Home prices nationwide, including distressed sales, increased on a year-over-year basis by 2.5 percent in June 2012 compared to June 2011 (see top chart above). On a month-over-month basis, including distressed sales, home prices increased by 1.3 percent in June 2012 compared to May 2012. The June 2012 figures mark the fourth consecutive increase in home prices nationally on both a year-over-year and month-over-month basis.

2. Excluding distressed sales, home prices nationwide increased on a year-over-year basis by 3.2 percent in June 2012 compared to June 2011. On a month-over-month basis excluding distressed sales, home prices increased 2.0 percent in June 2012 compared to May 2012, the fifth consecutive month-over-month increase. Distressed sales include short sales and real estate owned (REO) transactions.

3. The CoreLogic Pending HPI indicates that July home prices, including distressed sales, will rise by at least 0.4 percent on a month-over-month basis from June 2012 and by 2.0 percent on a year-over-year basis from July 2011. Excluding distressed sales, July house prices are also poised to rise by 1.4 percent month-over-month from June 2012 and by 4.3 percent year-over-year from July 2011. The CoreLogic Pending HPI is a new and exclusive metric that provides the most current indication of trends in home prices. It is based on Multiple Listing Service (MLS) data that measure price changes in the most recent month.

4. “At the halfway point, 2012 is increasingly looking like the year that the residential housing market may have turned the corner,” said Anand Nallathambi, president and CEO of CoreLogic. “While first-half gains have given way to second-half declines over the past three years, we see encouraging signs that modest price gains are supportable across the country in the second-half of 2012.”

MP: A few more of my own highlights:

1. For CoreLogic's HPI excluding distressed sales, the 3.2% gain in June was the largest annual increase in six years, going back to the summer of 2006. 

2. For CoreLogic's combined HPI (including distressed sales), there were 15 states in June with 12-month increases of 4% or higher and 7 states with 12-month increases of 6% or more (see map above), led by Arizona (13.8%), Idaho (10.4%), South Dakota (10.1%), Utah (8.3%), Wyoming (7.7%), N. Dakota (6.3%) and Colorado (6.2%).

Bottom Line: With almost every new real estate report, evidence continues to accumulate that the housing market has passed the bottom and is in a new cycle of sustainable recovery.  Look for ongoing increases in home prices during the month of July, based on CoreLogic's Pending HPI estimate of a 4.3% gain, which would be the largest 12-month gain in more than six years. 

7 Comments:

At 8/07/2012 2:45 PM, Blogger Luther for Liberty said...

Dr. Perry - You state this is evidence of a "new cycle of sustainable recovery". Would this be a similar cycle of "sustainable" recovery that crashed starting in 2007 (according to this same chart)?

 
At 8/07/2012 5:50 PM, Blogger Jon Murphy said...

Luther,

I am wondering where you see a sustainable recovery in 2007? The rates of change are overtly negative in 2007. here in 2012, they are overtly positive. What parallel are you seeing?

 
At 8/07/2012 9:24 PM, Blogger juandos said...

"The rates of change are overtly negative in 2007. here in 2012, they are overtly positive"...

Positive jm?

So is Schiller merely playing the contrarian you think or might he have something worth considering?

Just asking is all...

 
At 8/07/2012 9:44 PM, Blogger Pulverized Concepts said...

Are we supposed to be happy or sad that home prices are going up? Aren't corn futures at an all time high? That must be cause for real joy, dancing in the streets! It means that beef, pork, chicken, Coca-Cola and a multitude of other products will increase in cost as well so the elation should be widespread. And these houses that now cost more, are they bigger? Do they have more bathrooms and bedrooms? Or are they just the same as they were when they were worth less? Should I feel like a boob for not buying a house a year ago?

 
At 8/08/2012 8:46 AM, Blogger Jon Murphy said...

So is Schiller merely playing the contrarian you think or might he have something worth considering?

Schiller is a very intelligent man and one should always consider what he has to say.

I don't think he's wrong, just his timing is off. There certainly is demand for housing units. Remember that housing includes not only single-family units, but also multi-family units (apartments). There is significant demand in the multi-family segment. Single is weaker, but its rates of change are still rising.

Given the current macroeconomic conditions, as well as what economic indicators are suggesting for the next year, I'd expect housing sales to continue to improve, but weakness could set in around this time next year (possibly earlier, in the second quarter sometime). If I understand Schiller correctly, I believe he is calling for this weakness much sooner.

 
At 8/08/2012 8:47 AM, Blogger VangelV said...

Bottom Line: With almost every new real estate report, evidence continues to accumulate that the housing market has passed the bottom and is in a new cycle of sustainable recovery. Look for ongoing increases in home prices during the month of July, based on CoreLogic's Pending HPI estimate of a 4.3% gain, which would be the largest 12-month gain in more than six years.

It the housing market were so healthy why is the Fed buying mortgage paper and why is FHA guaranteeing 4% down mortgages for homes that are selling at $700K? You are mistaking the effects of liquidity injections for a sustained recovery. That would be wrong.

 
At 8/08/2012 12:09 PM, Blogger juandos said...

"just his timing is off"...

Hmmm, interesting jm...

Maybe you have a point there if the local rag is reporting it correctly...

O.K. thanks...

 

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