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May 2014 Home Prices Increased 8.8 Percent Year Over Year

Year-Over-Year Growth Slips Below Double-Digits for First Time Since Early 2013

Molly Boesel    |    Housing Policy

Today, CoreLogic reported that May 2014 national home prices increased by 8.8 percent year over year, and increased by 1.4 percent month over month from April. This marks the 27th consecutive month of year-over-year increases in the CoreLogic Home Price Index (HPI). Excluding distressed sales, home prices increased 8.1 percent from May 2013 and increased 1.2 percent from the prior month. Including distressed sales, prices were still 13.5 percent below peak levels, and excluding distressed sales, prices were down 9.3 percent from the peak in April 2006.

Including distressed sales, year-over-year home prices were up in the District of Columbia and every state. Hawaii led the country with a 13.2-percent price increase from May 2013, followed closely by California with a 13.1-percent increase. Excluding distressed sales, 48 states saw a month-over-month rise in prices, with Michigan (+4.2 percent) and New York (+3.5 percent) showing the largest increases and Montana (-0.9 percent) and the District of Columbia (-0.6 percent) showing the largest decreases.

Ten states reached new highs in home prices in May 2014[1]. Conversely, despite rapid appreciation, Nevada remained at 38.1 percent below its peak level from 2006, followed by Florida (-34.3 percent). Figure 1 shows the current, maximum and minimum year-over-year growth rates for the 25 states with the highest year-over-year appreciation. The figure illustrates that some of the states now growing the fastest also fell the farthest in the housing crisis.

In addition to the overall price indices, CoreLogic analyzes four individual home-price tiers. The price tiers tracked by the CoreLogic HPI are calculated relative to the mean national home price and include homes that are priced 75 percent or less below the mean (low price), between 75 and 100 percent of the mean (low-to-middle price), between 100 and 125 percent of the mean (middle-to-moderate price) and greater than 125 percent of the mean (high price).

Figure 2 shows the levels of the four price tiers indexed to January 2011. The two lower-priced tiers have recovered the most from their trough levels (both hit bottom in March 2011), with the low-price tier recovering 38.7 percent from the trough and the low-to-middle tier recovering 32.2 percent from the trough. As of May 2014, the low-price tier increased 13.9 percent year-over-year, with 10.8 percent of that gain happening in 2014. The two higher-price tiers both bottomed out in February 2012, with the middle-to-moderate price tier recovering 29.8 percent from the trough and the high-price tier recovering 25.2 percent from the trough. The high-price tier fell the least, at 28 percent peak-to-trough, and is currently 9.9 percent below its peak. The low-to-middle price tier fared the worst in the housing crisis, falling 37.2 percent peak-to-trough, and is now 17 percent below peak levels.

© 2014 CoreLogic, Inc. All rights reserved

[1] The states that reached new highs in home prices in May 2014 were: Alaska, Colorado, Iowa, Louisiana, Nebraska, New York, North Dakota, Oklahoma, South Dakota, and Texas