The US homes market has stabilised and is on the launch pad ready to fire ahead of pre-recession values, according to a leading house price index.
Nationwide, average prices were 12.2% up in February 2014 up compared to 12 months earlier, according to research firm CoreLogic.
February was also a landmark, as the month marked the 24th in a row where home prices excluding distressed sales increased year-on-year.
Stripping out distressed sales, home prices rose an average 8% in the year.
Compared with the month before, February 2014 prices increased 0.8%.
Nevertheless, despite months of increasing prices, average home prices across the USA are still 16.9% below their peak in April 2006.
Price rises likely to slow
Dr Mark Fleming, chief economist for the firm, explained that as the economy improves over the next year, price rises will slow.
“Spring kicks off the home buying season in the States,” he said. “Prices will keep rising and they are on track to hit and even go beyond their peak, but this is likely to happen later rather than sooner.
“As people have more money in the bank and lending problems ease, more homers will come to the market and a larger supply of properties will moderate prices.”
Short term projections for the US homes market expect prices to increase by 0.5% in March 2014, which equates to an average nationwide year-on-year rise of 10.5%.
Anand Nallathambi, the firm’s president and CEO, anticipates although growth rates will slow, they will continue to rise.
“This month ticks off two straight years in improving average house prices across the whole country,” he said. “We expect to see house values continue to rise consistently, and that should provide a stimulus for more sales and more growth in the economy.”
Best and worst performing states
The five US states with the highest house price increases year-on-year until February 2014 were:
California – up 19.8%
Nevada – up 18.5%
Georgia – up 14.2%
Oregon – up 13.8%
Michigan – up 13.5%
The firm also looked at the five states whose average house prices were most below their April 2006 peak:
Nevada – behind 39.9%
Florida – behind 36.4%
Rhode Island – behind 30.9%
Arizona – behind 30.5%
West Virginia – behind 26.6%
The index not only shows house prices are rising, but the number of homes nationwide facing foreclosure has fallen for 28 straight months as well.
Year-on-year, the February 2014 figure shows the inventory of repossessed homes for sale has fallen to 752,000 or 1.9% of all homes – down from 2.9% a year ago.