Annual home
WASHINGTON (MarketWatch) - Home prices ticked up in September, pushing annual growth to the fastest pace since early 2006, according to data released Tuesday.
In September, about five years after the housing crisis started, home prices rose 0.2%, while the annual pace reached 12%, according to CoreLogic, an Irvine, Calif.-based analysis firm. National home prices in September were about 17.4% below a peak level, but continued to increase, supported by pent-up demand and relatively low inventory.
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'Average home prices in nearly half the states are now within striking distance of their pre-downturn pricing peaks,' said Anand Nallathambi, CoreLogic's chief executive.
At the state level, home prices in Nevada saw the fastest growth, posting an annual rate of 25%, including distressed sales. However, Nevada was hit particularly hard when the bubble burst, and prices there remain about 41% below peak.
Excluding distressed properties, such as short sales, annual price growth reached 10.8% in September, also the fastest pace since early 2006. Monthly growth excluding distressed properties was 0.3%.
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CoreLogic's report echoes other recently released housing data that show speedy annual price growth. However, there are signs that monthly gains are slowing down. The S&P/Case-Shiller gauge that tracks 20 cities showed that seasonally adjusted home prices rose 0.9% in August, below a recent peak rate of 1.9% in March.
Economists expect home-price growth to moderate, as rising mortgage rates curb some demand, cutting pressure on prices. However, the Federal Reserve recently announced that it is maintaining its massive asset-purchase plan that has been exerting downward pressure on long-term rates. Industry experts expect the Fed to start tapering next year.
Price growth could also slow due to expanding inventories as more sellers become willing and able to place their homes on the market. Buyers like slower home-price growth more than sellers. However, appreciation that's too fast will keep some buyers from entering the market, possibly hurting sales.
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