There are further signs that a housing recovery is taking effect as national home prices increased on a quarterly and yearly basis for the second straight month after nearly two years of a downfall, according to Clear Capital’s home data index market report.
In June, home prices went up 1.7% in the latest rolling quarter— the most recent four months compared to the previous three months—and year, respectively, which is 1.3 percentage points greater than the May figures.
Regional improvement occurred throughout the country, but the West made the largest contribution to the rise in national home prices. The Truckee, Calif.-based valuation provider found a 3.5% quarter-over-quarter increase in the West, making it four consecutive months of quarterly gains for this area.
Growth spread across all home price tiers in the West as demand is outpacing supply and driving up values for low, mid and high priced properties, an important “next step in the progression of this recovery,” Clear Capital said.
Over the last quarter, low tier gains came in at 3.6% (sales less than $140,000), mid tier gains were 3.1% (homes selling between $140,000 and $347,000), and top tier gains registered at 3.2% (sales higher than $347,000). So far, the West is the only region to see appreciation across all price tiers.
The West is two percentage points ahead of the South in June, which saw home prices rise by 1.5% on a quarterly and yearly basis. Meanwhile the quarterly performance in the Northeast doubled over the previous month, with values up by 0.8%.
After persistent price declines over the last year, the Midwest saw the largest jump over the prior month with a 1.2% quarterly increase in home values. In May, this region experienced quarterly losses of 2%.
Typical for a market in the early stages of recovery, low tier sales in the Midwest (sales less than $101,000) saw the biggest quarterly gains of 2.2%, nearly a 4.0 percentage point advance over last month’s losses.
However, the mid and top tier segments continue to fall behind the increases in low tier homes with growth of only 1.6% and 0.4%, respectively.
Clear Capital said the majority of the top 50 metropolitan markets made positive strides in June as only seven cities saw prices fall on a quarterly basis. Out of all the markets that posted quarterly declines, four had price depreciation greater than 1%.
The remaining 43 MSAs turned out growth over the last quarter, with average gains of 3%, doubling the rate of average declines. Additionally, 10 of the 43 markets saw quarter-over-quarter price growth exceed 5%, providing evidence the recovery is also picking up steam on a metro market level.
“June home price trends provided further evidence that housing has turned the corner, with the momentum of the recovery picking up speed,” said Alex Villacorta, director of research and analytics at Clear Capital. “Right now, the market is the strongest it’s been since the start of the downturn, and barring a major economic meltdown, we expect to see this organic growth sustain and strengthen through the end of the year.”
