Home prices nationally rose by 5.5 percent year-over-year in November, with an increase of 4.6 percent projected over the next 10 months ending in November of this year, according to CoreLogic’s latest update.
The pace of home price gains slowed by the end of 2014, but that is likely just a lull as economic growth fuels buyer confidence and “their willingness to purchase a home and invest in their future,” says Anand Nallathambi, president and CEO of CoreLogic.
While falling gasoline prices has helped most consumers save money and spur more purchases, there is a downside for the energy sector, their employees and their communities which could negatively impact home values in some states, CoreLogic points out.
“After decelerating for most of the year, home price growth has been holding firm between a 5-percent and 6-percent growth rate for the last four months,” said Sam Khater, deputy chief economist for CoreLogic.
“However, pockets of weakness are clear in Baltimore and Washington D.C., and three of the top four states with the highest price appreciation are energy intensive and had been benefitting from the energy boom which is currently receding as oil prices trend downward.
“These states—Texas, Colorado and North Dakota, may see some downward pressure on prices in 2015.”
Oil’s collapse is only one factor behind the slowing down of home prices. Year-over-year home-price growth has been trending down since late 2013 as more owners put up their homes for sale, loosening up inventories in many communities.
Despite the gradual run-up in prices, U.S. housing markets have not completely recovered from the devastating hit of the bubble burst and financial crisis of 2007-2008. In Nevada, for example, home prices in November were 36 percent below the local peak. Prices were down 33 percent in Florida and 29 percent in Arizona from their peak. Through November 2014, U.S. home prices overall were down 12.9 percent from a 2006 bubble peak.