Home price index shows April strength
National home prices marked their second year-over-year increase in April, according to a widely watched index, signaling that housing strengthened during the critical spring shopping season.
The home price index by research firm CoreLogic increased 1.1% over April 2011, notching the second consecutive year-over-year increase since June 2010. The index includes sales of foreclosed and other so-called distressed properties.
Excluding sales of those distressed homes, prices were up 1.9% from the same period a year earlier, a rate of improvement not seen since late 2006, and better than the brief period of housing strength in 2010 that was driven by popular buyer tax credits. CoreLogic forecast that prices will continue to rise in coming months due to a lack of homes available for sale.
“Home prices are responding to a restricted supply that will likely exist for some time to come — an optimistic sign for the future of our industry,” said Anand Nallathambi, president and chief executive of CoreLogic.
The most widely watched measure of home prices, the Case-Shiller index, has painted a different portrait of the national housing picture. Released last week, the index showed prices in the U.S. ended the first quarter at their lowest point since the housing crisis, with values in 20 major cities dropping 2.6% in March, compared with the same period a year earlier.
But many analysts have turned optimistic on housing despite those disappointing numbers, noting that given the lag in the Case-Shiller data, a turnaround in housing values will probably not be captured until well after its occurrence. While the Case-Shiller numbers are the industry standard, the CoreLogic numbers are followed by the Federal Reserve as well as many analysts.
Any significant housing rebound is unlikely to get underway until the shaky jobs market shows sustained improvement. A report last week showing that the nation’s unemployment rate in May rose for the first time in nearly a year, to 8.2%, and created on net just 69,000 jobs last month, convinced several economists that the U.S. is entering another summer slump.
But given the improvement in the CoreLogic data, as well as a steady increase in sales, the housing market looks poised to avoid the results of last year’s silent spring, in which the traditionally busy season posted a largely lackluster performance.
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