National home prices in May posted their biggest annual gain since February 2006, CoreLogic reported Tuesday.
When including distressed sales, home prices shot up by 12.2 percent year-over-year in May, marking the 15th straight month of increases, according to the data provider. From April to May, home prices climbed 2.6 percent.
“It’s been more than seven years since the housing market last experienced the increases that we saw in May, with indications that the summer months will continue to see significant gains,” said Dr. Mark Fleming, chief economist for CoreLogic. “As we approach the half-way point of 2013, home prices continue to respond positively to the reductions in home inventory thus far.”
CoreLogic’s pending home price index points to further improvements in June, with prices projected to exceed May’s increase with a 13.2 percent gain. Month-over-month, prices are expected to rise by 2.9 percent in June.
“Home price appreciation, particularly in much of the western half of the U.S., is increasing at a torrid pace,” added Anand Nallathambi, president and CEO of CoreLogic. “Across the country, pent up demand and continued low interest rates are fueling strong demand for a limited inventory of properties. We expect that trend to continue to drive up prices throughout the balance of the summer months.”
Western states dominated the top five list for home price appreciation in May, with Nevada in the lead with a 26 percent annual gain. The other states in top spots were California (+20.2 percent), Arizona (+16.9 percent), Hawaii (+16.1 percent) and Oregon (+15.5 percent). When including distressed sales, only two states experienced price declines over the last year: Delaware (-0.6 percent) and Alabama (-0.1 percent).
Out of the top 100 markets based on population, 97 experienced year-over-year price increases in May compared to 94 in April. Los Angeles’ 19.8 percent yearly gain placed it at the top of the list, followed by Phoenix (+18.3 percent), Riverside (+18 percent), Atlanta (+16.2 percent), and Houston (+10.2 percent).