The U.S. property market recently rounded a corner on its way to recovery and the good news keeps on coming. Data from Clear Capital show that U.S. house prices were up 2% in the last quarter in its July Home Data Index. Many metros areas are seeing double-digit gains over the last year and the West is leading the nation in price increases. Even areas that have struggled the most in recent years are showing stabilization in prices. July was the third consecutive month for price gains and experts believe more consumer confidence is the key to continued improvement. For more on this continue reading the following article from Property Wire.
Residential property prices in the US increased by 2% in the last quarter despite the country’s overall economic outlook still being stunted, the latest analysis from Clear Capital shows.
One third of the top metros posted double digit yearly gains, while the bottom 15 metros generally saw prices stabilise, it says in its July Home Data Index.
‘July home price trends continued to show promise at a time when the strength of the broader economy is in question on many fronts,’ said Alex Villacorta, director of research and analytics at Clear Capital.
‘The national housing market defied the drag of a softening economy with increasing gains of 2% over the last rolling quarter. Housing gains in the West continued to lead the nation, and more importantly, for the second month in a row, the price rebound has broken out of the low price tier segments into higher priced homes. As the pool of buyers expands, the West continues to position for the next phase of recovery,’ he explained.
‘While significant risks remain at large, housing now has the potential to enter a positive feedback loop. Price increases could lead to increased confidence. This could motivate buyers, propelling the recovery in spite of the potential economic slowdown outside the housing market. Of course it’s still possible that housing could experience a pull back if contagion from other economic sectors bleeds through, but right now there appears to be a healthy level of resilience,’ he added.
The 2% price increase comes on top of a 1.7% gain in the previous quarter. The West and Midwest saw 4.4% and 2.1% quarterly growth, respectively. Meanwhile, the South held its ground with quarterly gains of 1.5%, and the Northeast saw price growth of 0.4%, a slight step back from last month’s 0.8% quarterly gains.
Villacorta said that quarterly growth across regions hasn’t been this robust since October 2011 when prices experienced a short burst in gains. He also pointed out that two out of four regions have now seen rolling quarterly growth over the last two months, and three out of four regions have experienced quarterly gains over the last five months, fuelling yearly gains.
Yearly growth for the broader national market expanded to 2.2% in July, 0.5% higher than June. Boosting growth at the national level, the West saw home prices roll up an impressive 6.2% over the previous year. The South and the Northeast also contributed to national price growth, with 1.8% and 1.6% yearly gains, respectively. While the Midwest has yet to post long term growth, the slight decline of 0.1% improved over last month’s yearly losses of 0.6%.
July marked the third consecutive month of national yearly gains, with longer term price trends at the national level last seen this strong in September 2010, when the First Time Homebuyer Tax Credit temporarily drove prices higher.
‘Confidence in housing will be key to future progress, giving buyers a reason to get off the sidelines, resulting in higher demand that could feed additional gains, and creating a positive feedback loop. Certainly the alternative is still possible, where a hiccup in consumers’ outlook could stall progress, further diminishing the willingness of a homebuyer to make a purchase,’ the report concludes.
This article was republished with permission from Property Wire.