By Peter Ricci
Home prices increased 4.6 percent year-over-year in August in the latest CoreLogic Home Price Index, which is the largest yearly increase in more than six years.
Indeed, not since July 2006 have home prices risen as much in one year, and with its sustained rise throughout 2012, the Home Price Index is at its highest level since August 2006.
CoreLogic Home Price Index & Distressed Property Sales
With its Home Price Index, CoreLogic tracks two separate readings of home prices, one involving distressed property sales and another excluding them; as can be expected, the two readings produce different results:
- The aforementioned year-over-year increase of 4.6 percent included distressed sales; when distressed sales are excluded, prices rose 4.9 percent from last August.
- From July to August, the divide was similar – including distressed sales, the Home Price Index rose 0.3 percent, but excluding them, it rose 1.0 percent.
- This marks the sixth consecutive month of price increases for both yearly and monthly measures.
- The inclusion/exclusion of distressed property sales also had a marked impact at the state level. For instance, when including distressed sales, the five states with the highest home price depreciation from July to August were Rhode Island (-2.6 percent), Illinois (-2.3 percent), New Jersey (-1.4 percent), Alabama (-0.7 percent) and Connecticut (-0.5 percent). When distressed sales were excluded, though, Rhode Island, New Jersey and Alabama were the only three states in the entire country to post any price depreciation.
Home Price Index of the Future
In addition to its Home Price Index, CoreLogic has also been making use of the Pending HPI, a relatively new measure that anticipates what the Home Price Index will be for the following month.
For the next index, which will study home prices in September, the Pending HPI is anticipating a 5 precent increase in home prices from September 2011, though it is also predicting a slight, 0.3 percent decline from August to September, which is inline with what other analysts have predicted for home prices as the year concludes.