U.S. home prices continued their upward climb in May, according to real estate data firm CoreLogic, with historically low mortgage interest rates fanning the flames of home buying.
“Mortgage rates on 30-year fixed-rate loans remained below 4 percent through May, helping to fuel home-purchase activity,” said Frank Nothaft, chief economist for CoreLogic. “Our homes-for-sale listing data shows that markets with high demand and limited supply, such as San Francisco, are recording double-digit appreciation rates over the past year.”
The CoreLogic Home Price Index (HPI), a measure of home prices across the nation, including distressed sales – short sales and real estate-owned (REO) sales – increased 6.3 percent from on year earlier, marking the 39th month of year-over-year price gains. Sales price also grew 1.7 percent from April of this year.
“The rate of home price appreciation ticked up in May with gains being fairly widely distributed across the country,” said Anand Nallathambi, president and CEO of CoreLogic. Only five states experienced price declines when including distressed sales. Massachusetts had a 4.8 percent decline, Connecticut prices dropped by 1.8 percent, Maryland decreased 1.5 percent, Mississippi fell by 1.4 percent and Louisiana slipped 0.8 percent.
Prices rose most in South Carolina with a 10.3 percent yearly increase. The other states in the top five were Colorado at 9.8 percent, Washington with 8.8 percent, Florida at 8.7 percent and Nevada with an 8.3 percent increase in sales prices. A majority of states and the District of Columbia saw their home sales prices rise to or within 10 percent of their all-time highs.
All the increases have led to other positive developments in the housing market. “Higher home prices over the past couple of years have spurred increases in new single-family construction,” said Nallathamb. “Sales of newly built homes during the first five months of 2015 were up 23 percent from a year ago, and as rising values build equity for homeowners, we expect to see more existing homes offered for sale in the coming year.”