Homes in the United States are still rising in price, fuelled by low mortgage interest rates, according to new research.
In May, prices were up an average 6.3% across the nation, says independent research firm CoreLogic.
This was the 30th month in a row prices have risen – although the rate of increase is slowing.
The monthly increase between April and May was 1.7%.
Despite the increases, average home prices in the US are still 8.4% below their peak in April 2006.
The firm cites a backlog of repossessed homes still listed for sale as the obstacle to higher prices as supply of homes in many areas still exceeds demand, pushing values down.
New build sales up
As a result, June’s price rises are predicted to drop to 0.9% month-on-month and 5.1% year-on-year.
“Gains were seen across the country in May,” said a spokesman for the firm.
“As home prices have gone up, this has triggered the building of new single family properties. Sales of new build homes this year are up 23% on a year ago, but we expect to see more existing homes for sale in the coming months.”
May’s figures showed 10 states achieving new highs for home prices – Alaska, Colorado, Iowa, Nebraska, New York, North Carolina, Oklahoma, Tennessee, Texas, Vermont and the District of Columbia.
However, five states recorded falling prices – Massachusetts (14.8%), Connecticut (-1.8%), Maryland (-1.5%), Mississippi (-1.4%) and Louisiana (-0.8%).
The highest price rises were in South Carolina (10.3%), Colorado (9.8%), Washington (8.8%), Florida (8.7%) and Nevada (8.3%).
Bargain basement prices
Despite the rise and falls, the five states with the highest climb back to peak prices are Nevada (32.9%), Florida (28.8%), Rhode Island (27.5%, Arizona (26%) and Maryland (23.1%).
The data reveals that expats or second home owners seeking properties in Las Vegas, Nevada, or the sunshine state of Florida can still pick up bargains at around 30% below the peak of the market.
These bargains may not stay on the market for too long as both states are showing good house price recovery.
Overall, repossessed homes made up 11% of all house sales in April 2015 – but the market varied widely with Michigan and Florida both having distressed homes contributing to 21.7% of all sales.
CoreLogic says only North Dakota and the District of Columbia are ‘anywhere near’ pre-downturn distressed sale levels. Both are within 1% of the norm.
