Housing

Five States With New Highs in Home Prices

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Compared with 2013, home prices rose 12.2% in February, marking a 24th consecutive month of year-over-year gains, according to research firm CoreLogic. Home prices in four states — Colorado, Nebraska, North Dakota and Texas — and the District of Columbia surpassed their all-time highs in February, even including distressed sales.

Home prices rose 0.8% month-over-month from January to February. The data includes sales of distressed properties, and the index is a non-seasonally adjusted three-month weighted average. Distressed sales include short sales and real-estate owned (REO) transactions.

Excluding distressed sales, February prices rose 8% compared with January. Home prices remain 16.9% below their April 2006 peak when distressed sales are counted, and 12.1% below the peak when distressed sales are excluded.

In the month of February, homebuilder stocks mostly peaked late in the month and were up nicely. Toll Brothers Inc. (NYSE: TOL) posted a monthly gain of 6.15%, and PulteGroup Inc. (NYSE: PHM) shares rose 3.29%. D.R. Horton Inc. (NYSE: DHI) posted a monthly gain of 4.59%, and KB Home (NYSE: KBH) shares posted a gain of about 5.48%. Both KB Home and D.R. Horton have now posted consecutive monthly gains of nearly equal size.

CoreLogic expects March housing prices to rise by 10.5% year-over-year and to rise by 0.5% month-over-month. Excluding distressed sales, CoreLogic’s year-over-year estimated increase for March is forecast at 9.3%, and the month-over-month estimate is forecast to rise by 0.4%.

The company’s chief economist said:

Although prices should remain strong in the near term due to a short supply of homes on the market, price increases should moderate over the next year as home equity releases pent-up supply.

Including distressed sales, February year-over-year home prices rose the most in California (prices up 19.8%), Nevada (18.5%), Georgia (114.2%), Oregon (13.8%) and Michigan (13.5%). The five states where home prices remain furthest from their peak January values are Nevada (down 39.9%), Florida (36.4%), Rhode Island (30.9%), Arizona (30.5%), and West Virginia (26.6%. Corelogic noted that 22 states and the District of Columbia are now at or within 10% of their home price peaks.

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