After several years of price declines, in July U.S. home prices rose significantly on both a yearly and monthly basis, according to information from real estate data company CoreLogic.
Compared with one year ago, home prices gained 3.8 percent in July, the largest increase in six years, since before the housing bubble burst. Home prices also increased 1.3 percent from June, marking five consecutive months of monthly prices growth.
CoreLogic believes the numbers point to the beginning of a real housing recovery.
“It’s been six years since the housing market last experienced the gains that we saw in July, with indications the summer will finish up on a strong note,” said Anand Nallathambi, president and CEO of CoreLogic in a press release. “Although we expect some slowing in price gains over the balance of 2012, we are clearly seeing the light at the end of a very long tunnel.”
The states that saw the best growth rates during the past year include Arizona and Idaho, where prices rose by 16.6 percent and 10.0 percent respectively. Others in the top five include Utah, South Dakota and Colorado.
On the other end, though, with falling yearly prices were Delaware, Alabama, Rhode Island, Connecticut and Illinois. For example, prices dropped 4.8 percent in Delaware and 4.6 percent in Alabama.
Ultra-mortgage interest rates coupled with dwindling housing inventory in the lower price brackets have contributed to upward pressure on home prices. If more distressed properties get released to the market or rates were to rise, prices could experience a decline again. Still, CoreLogic says the improvements should stick this year.
“The housing market continues its positive trajectory with significant price gains in July, and our expectation of a further increase [4.6 percent] in August,” notes CoreLogic’s chief economist Mark Fleming in a press release . “While the pace of growth is moderating as we transition to the off-season for home buying, we expect a positive gain in price levels for the full year.”