Home Prices Rising the Most Since Crisis
NEW YORK (TheStreet) -- Home prices are registering the biggest increases on a year-on-year basis since the crisis, latest data shows.
Core Logic on Tuesday said home prices rose 6.3% in October on a year-on-year basis, the largest increase since June 2006. Prices have gained year-on-year for eight consecutive months.
On a month-over-month basis, including distressed sales, home prices decreased by 0.2 percent in October 2012 compared to September 2012. This is expected, as prices typically taper in the months following summer.
Housing prices, excluding distressed sales, rose 5.8%in October 2012 compared to a year ago, according to Core Logic.
The share of distressed sales is falling, helping to buoy prices. Vacant foreclosed homes not only sell at a steep discount to the market but also bring down the prices of properties in the neighborhood.
Core Logic's Home Price Index is a repeat-sales index that tracks increases and decreases in sales prices for the same homes over time, "which provides a more accurate "constant-quality" view of pricing trends than basing analysis on all home sales.," according to the firm.
Meanwhile Trulia released its November 2012 Home Price Monitor which looks at "asking prices", which it says is a leading indicator of sales price. Asking prices rose 3.8% year-over-year in November, the largest year-over-year gain in asking prices since the crisis.
Excluding foreclosures, asking prices were up 4.3% over a year ago.
Trulia's Price monitor adjusts for mix of homes and reflects change in prices for similar homes in similar neighborhoods.
"Prices are rising faster than at any point since the bubble burst, but the price recovery is becoming more uneven," said Jed Kolko, Trulia's Chief Economist. "Even though prices rose at a 10 percent annualized rate in the last quarter, more metros are seeing price declines."
Core Logic meanwhile notes that home prices are still 27% below their peak. So while rising home prices are welcome news for the economy, the increases are still too modest for the millions of borrowers underwater.
-- Written by Shanthi Bharatwaj in New York.