US House Price Rises Flat For Yet Another Month

House prices in the US are flat again after more than four years of monthly rises, according to the latest data.

Both the CoreLogic House Price Index and the Standard & Poor Case-Shiller Index reported similar gains.

S&P looks at home values in 20 major metropolitan areas and calculated the annual price rise was 5% for July.

“Both the housing sector and the economy continue to expand with home prices continuing to rise at about a 5% annual rate,” said a spokesman.

“There is no reason to fear that another massive collapse is around the corner.”

Mixed market

Meanwhile, CoreLogic calculated home values for August and found they were up by 1.1% from July and 6.2% compared with 12 months earlier.

The company also forecasts prices will rise 5.3% over the next year.

US house prices are still an average 5.6% below the peak last seen in April 2006 and are not expected to break through the record limit until October next year.

Individually, 18 states have already climbed back to new record high prices, although values dropped by 1.1% in Connecticut.

Five states that remain the farthest away from peak levels are Nevada (-31.4%); Florida (-22.9%); Arizona (-22.4%); Maryland (-19.3%) and Rhode Island (-18.5%).

The states with the highest increases, says CoreLogic, were Oregon (10.3%); Washington (10.2%); Colorado (9.1%); Utah (7.7%) and South Dakota (7.7%).

Millions still in negative equity

CoreLogic also lists Denver as the metropolitan area with the highest annual price increase at 10%.

Next was Miami, Florida at 7% and Los Angeles, California, at 6.9%.

However, S&P rates Denver, Colorado; Seattle and Portland, Oregon as the top three.

CoreLogic considers the housing markets in Denver; Houston, Texas; Los Angeles, Miami and Washington DC as overvalued and areas to expect a price correction over the coming months.

The firm says 548,000 homes moved out of negative equity in the second quarter of 2016, and if home price forecasts are accurate, another 700,000 will join them if values rise 5% over the next year.

Around 3.6 million homes still owe more money to mortgage lenders than their homes are worth, while a million have less than 5% equity and 8.6 million have less than 20% equity.

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