US house prices have gained ground for a landmark fifth year in a row.
The market carried last year’s momentum forward in January as prices for a single-family home were up 0.7% on those in December and 6.9% year-on-year.
Prices are expected to keep rising in February – by 0.1% month-on-month and 4.8% compared with a year earlier, says housing market research firm CoreLogic.
Despite five years of steady price rises, the monitor explains that double-digit price rises have long passed and that average house values across the country are still 4% below their peak seen in April 2006.
They are expected to pass the peak in October – more than a decade after the downturn in the market.
“With lean for sale inventories and low rental vacancy rates, many markets have seen out prices outpace inflation,” said Dr Frank Northaft, CoreLogic’s chief economist.
Only one state saw a price drop
“Over the past 12 months, our home price index increased 6.9% and our rental increase rose 2.9%. Both were rising faster than inflation.”
Only one state saw a drop in house prices – Maine, where values fell by 1.8%.
States with the highest average annual price rises were: Washington (10.8%); Oregon (10.3%); Colorado and South Dakota (both 9.1%) and Idaho (9.0%).
The five states with prices farthest from the April 2006 peak were Nevada (-31.6%); Florida (-20.8%); Arizona (-20.6%); Connecticut (-20.0%) and Maryland (-19.1%).
Four metropolitan areas are still classed as overpriced – Denver, where annual prices were up 9.9%; Houston, which saw a more modest 3.6% yearly increase; Miami, which posted a 6.4% annual rise and Washington, with a 5% rise in a year.
Home ownership at a 50 year low
Meanwhile tax data reveals 37% of homes sold in the US last year were purchased by landlords for private renting.
Statistics show home owner occupiers are at a 50-year low.
Many of the homes were bought cheaply after foreclosure by private equity companies, but their share of the market is falling from 7.8% of all purchases in 2012 to 2.9% last year.
The jury is still out over if private landlords are good for the US housing market.
The arguments range from landlords are filling a need to provide housing, to buyers are crowded out of the market by investors who can more easily afford to buy.