By Ryan Jackson
Home prices increased at the fastest rate in 25 years during the spring selling season, according to real estate research firm CoreLogic. U.S. housing prices jumped an average of 1.4% during the month of June alone, the company said.
The most substantial improvement in home prices has developed over the last three months since the housing downturn, according to the company’s data. The firm tracks the top 100 U.S. urban housing markets. “After reaching a cyclical low in February 2012, home prices increased 5.6% through May” representing the highest nominal increase in home values in the past 25 years, according to CoreLogic.
The firm sells its housing research to the financial industry, including banks, real estate brokerage companies, hedge funds, commercial investment firms and other investors, including many publicly traded Wall Street companies.
However, a sustained rebound in home prices through the rest of the year is unlikely in the majority of the country since median salaries paid to workers havent increased since 1998, and a huge back-log of homes in default of their mortgages are waiting to be foreclosed. Wages paid to employees greatly influence ups and downs in the U.S. housing market, and impact a citys home prices more substantially than many other factors.
In May, 71 of the 100 urban markets the company tracks increased in home value, which represents the highest number of markets with increasing home prices since November 2006 when the real estate bubble was in high gear.
The fastest inflating markets are being driven by a high volume of discount priced foreclosures and bank assisted short sales, including California, Arizona and Nevada. But the historically high level of underwater homeowners who owe more on their homes than they could get in the current marketplace is keeping a lid on the housing market since most upside down mortgage holders are unable to put their homes on the market to sell.
The issue is keeping any sort of rapid double-digit housing appreciation from developing in most areas of the country, despite growing interest in most markets. Home price inflation, however, in the lowest price ranges is rebounding at more than three times the median national rate.