US house prices increased for the 37th month in a row by recording a 5.9% annual rise in March, according to property experts.
Taking distressed sales out of the figures, house prices went up by 6.1%, says house price analysis by property consultants CoreLogic.
The month-by-month increase was much lower, at 2%.
Despite three years of healthy growth, the US house market is still 11% below the April 2006 peak, explains the firm. The gap is closer when distressed sales are excluded – at 6.7% below their highest ever level.
Based on these figures, CoreLogic expects US house prices to continue to grow at a rate of 5.1% over the next 12 months.
“All the indicators show that we should expect house prices to keep moving upwards for the next year,” said a spokesman for the firm.
Only two states in the red
“The hope is that this strong month-on-month gain will herald faster house price growth over the coming months.”
The firm also argues that a shortage of new homes, more people in work who can afford to buy a home and more couples getting together are driving housing markets in many metropolitan areas.
Dallas, Denver, Houston, Seattle and San Francisco are seeing near record growth, said the spokesman.
Digging into the data, five states showed record year-on-year house price appreciation in March 2015 – Colorado (9.2%), South Carolina (9.1%), Kansas (8%), Texas (8%) and Nevada (7.6%).
Two states and the District of Columbia were in the red – Connecticut (-0.6%), Maryland (-0.1%) and the District of Columbia (-0.2%).
The states still farthest from their peak prices, despite current price rises, are Nevada (-34.7%), Florida (-31.5%), Rhode Island (-29%), Arizona (27.4%) and Connecticut (-25.5%).
Oil bubble set to burst
Meanwhile another housing analyst, Fitch Ratings, is warning that homes in the Texas cities of Houston and Austin are overvalued by around a fifth and warns the market is heading for a price correction.
Although Texas is heading the charts for house price recovery in the US, the firm believes the boom is based on demand from the state’s expanding oil economy and that prices could fall if the price of oil drops again.
House price alerts also went out to Oklahoma and North Dakota from the analysts.