January Home Price Gains Push Prices to New Highs in Three States

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Home prices rose 12% in January, compared with the same month a year ago, for a 23rd consecutive monthly year-over-year gain, according to research firm CoreLogic. Home prices in Louisiana, Nebraska and Texas surpassed their all-time highs in January, even including distressed sales.

Home prices rose 0.9% month-over-month from December to January. The data include sales of distressed properties, and the index is a non-seasonally adjusted three-month weighted average. Distressed sales include short sales and real-estate owned (REO) transactions.

Excluding distressed sales, January prices rose 9.8% compared with December. Home prices remain 17.3% below their April 2006 peak when distressed sales are counted, and 13.3% below the peak when distressed sales are excluded.

In the month of January, homebuilder stocks mostly peaked late in the month and their stock prices moved from down a little to up nicely. Toll Brothers Inc. (NYSE: TOL) posted a monthly drop of about 0.7% and PulteGroup Inc. (NYSE: PHM) slipped 0.25%, while D.R. Horton Inc. (NYSE: DHI) posted a monthly gain of 5.2% and KB Home (NYSE: KBH) shares posted a gain of about 5.8%.

CoreLogic expects February housing prices to rise by 12.5% year-over-year and to by 0.7% month-over-month. Excluding distressed sales, CoreLogic’s year-over-year increase for February is forecast at 10.4% and the month-over-month estimate is forecast to rise by 1.1%.

CoreLogic’s CEO noted:

Excluding distressed sales, all 50 states and the District of Columbia showed year-over-year home price appreciation for January. Nationwide price growth like this should continue as the market comes out of hibernation for the spring buying season.

The company’s chief economist added:

Polar vortices and a string of snow storms did not manage to weaken house price appreciation in January. The last time January month-over-month and year-over-year price appreciation was this strong was at the height of the housing bubble in 2006.

Including distressed sales, January year-over-year home prices rose the most in Nevada (prices up 22.2%), California (20.3%), Oregon (14.3%), Michigan (13.7%) and Georgia (13.4%). The five states where home prices remain furthest from their peak January values are Nevada (down 40.1%), Florida (36.4%), Arizona (30.8%), Rhode Island (30.5%) and West Virginia (28.9%). Corelogic noted that 22 states and the District of Columbia are now at or within 10% of their home price peaks.

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