Home prices continued to grow in the dwindling months of 2014, however, their decelerating pace will likely continue as 2015 gets underway, according to the latest Home Price Index Report from CoreLogic.
Including distressed sales, home prices nationwide increased 5.5% in November 2014 compared to November 2013. This change, CoreLogic notes, represents the 33rd month of consecutive year-over-year gains in home prices nationally. When looking at the monthly comparison, home prices increased a mere 0.1% in November from October.
When excluding distressed sales, home prices rose 5.3% nationally in November year-over-year, and 0.3% month-over-month compared to October 2014. Even so, all states and D.C. continued to show year-over-year price appreciation in November.
“After decelerating for most of the year, home price growth has been holding firm between a 5-percent and 6-percent growth rate for the last four months,” said CoreLogic Deputy Chief Economist Sam Khater in a written statement.
Despite the modest gain, CoreLogic forecasts home prices, including distressed sales, are projected to decrease 0.1% month-over-month from November to December, and increase year-over-year by 4.6%. Excluding distressed sales, the CoreLogic HPI Forecast projects prices to decrease 0.1% from November to December, while increasing 4.2% from November 2014 to November 2015.
Though home price gains have slowed toward the end of 2014, this may only be a temporary lull, says Anand Nallathambi, president and CEO of CoreLogic.
“While the CoreLogic HPI Forecast shows a slight dip in prices next month, we believe that prices will be up a year from now as continued economic growth fuels buyer confidence and their willingness to purchase a home and invest in their future,” Nallathambi said in a written statement.
At the state level, all states and the District of Columbia reported year-over-year home price appreciation during November, 29 of which are now at or within 10% of their peak gains.
The five states with the highest home price appreciation—including distressed sales—that bucked the national average were Michigan (9%), Colorado (8.8%), Texas (8.5%), North Dakota and Nevada (7.9%).
However, declining oil prices will play a factor in the future home price performance of several of these top states later this year.
“Pockets of weakness are clear in Baltimore and Washington D.C., and three of the top four states with the highest price appreciation are energy intensive and had been benefitting from the energy boom which is currently receding as oil prices trend downward,” Khater said. “These states—Texas, Colorado and North Dakota, may see some downward pressure on prices in 2015.”
Written by Jason Oliva