US property prices continue their upward trend and rose nationally by 6.9 per cent in the year to July. Furthermore, analysts predict further price increases over the next 12 months when they expect an average rise of 4.7 per cent. The price of property, however, still remains below its historic high.
One of the most comprehensive reports on the property market in the US, the CoreLogic House Price Index (HPI), found that on average property prices went up by 6.9 per cent across the nation in the year to July. The figure for the month from June to July came in at 1.7 per cent. These percentages, which include distressed properties (short sales and real estate owned sales), confirm the upward trend of the US property market where prices have been rising for 41 consecutive months.
Property prices still below peak
Despite these consistent price increases, US property still remains below its peak. Specifically, housing costs 6.6 per cent less than it did during April 2006 when property in the US reached its highest price ever. This national average hides big countrywide variations and prices in many states still lie further below their historic peak. Nevada currently registers the widest gap between peak and current prices with a 30.6 per cent difference. Property in Florida is not far behind with 28.1 per cent separating the height of prices in October 2006 and those paid now.
On the other hand, the property market in some states has regained peak levels. This is the case of Texas where the difference between now and then has levelled out to the extent that the historic high for property in Texas is currently July this year. Prices for housing in South Dakota and Tennessee also returned to levels seen at the height of the property boom years.
Texas property at top
In the July HPI, cities in Texas dominate the national ranking for the highest price rises. Single family homes in the metropolitan area of Dallas-Plano-Irving rose by 9.3 per cent over the 12 month period while property in Houston-The Woodlands-Sugar Land was not far behind with a 7.3 per cent increase.
In Florida, where property remains well below 2006 levels, the single family home market saw a price rise of 8 per cent between August 2014 and July this year. The increase for Q2 was 3.3 per cent reflecting brisker market conditions this year. According to Florida Realtors, sales of single family properties in Florida soared by 21.8 per cent in the year to July putting pressure on supply, which fell to just 4.5 months in the same month.
Predictions for further rises
In total, 95 of the total 100 core areas covered in the HPI report showed price increases in the year to July. This tendency in tandem with the continued upward shift in property prices across the US, prompted CoreLogic to predict a 4.7 per cent rise over the next year. “Low mortgage rates and stronger consumer confidence are supporting a resurgence in home sales of late,” said Anand Nallathambi, President of CoreLogic, commenting on the HRI report.