While home purchases have slowed in the past few months, it appears that prices continue to rise.
Black Knight Financial Services released a report showing that the national Home Price Index (HPI) improved in general throughout the month of May across 18,500 examined zip codes in the United States. Home prices are now just 11 percent off of their 2006 peak. The HPI represents the price of non-distressed sales by taking into account price discounts for REO and short sales.
The HPI rose a total of 0.9 percent in May to $239, which is a $14 increase year-over-year. However, indicative of the slowdown analysts have also been tracking since the beginning of the year, the HPI has only risen by $3 since the beginning of 2014.
At the state level, prices in Colorado and Texas hit record highs while Rhode Island, Michigan, Colorado, Connecticut, and Idaho made up the top five states in terms of percentage growth month-over-month. Maryland, Arizona, Hawaii, Louisiana, and California rounded out the bottom five.
The 10 metros with the largest increases showed a slight regional tendency toward Connecticut, which had four of the top ten. No other state claimed more than one top-performing metro. Among the 10 worst-performing metros there appeared to be great regional concentrations, with 4 metros in California and 3 in Florida. Among the lowest metros, only Lakeland, FL and Tuscon, AZ saw negative or zero percent growth.
The rising housing prices are a catch 22 proposition. On one hand the rise in prices allow sellers to regain some of the equity lost in the wake of the financial crisis. On the other hand, the beginning of 2014 has seen a considerable slowdown in the home sales and rising prices do little to reverse that trend.