Good news for housing – 13 states reached new highs in home prices in June, according to the new CoreLogic MarketPulse report. Texas, Oklahoma, Colorado, Louisiana, Alaska, Wyoming, Nebraska, Iowa, North Dakota, South Dakota, Tennessee, Vermont, and Washington D.C. were the big winners this summer.
Additionally, home prices between June 2013 and June 2014 improved a healthy 7.5 percent, but are down 12.9 percent from their peak in April 2006. Pre-foreclosure filings decreased by 12.5 percent from 83,500 to 73,100 per month nationally in June 2014 from a year ago, down 68 percent from the peak of 229,000 per month in March 2009. Foreclosure inventory is now down 35 percent nationally from a year ago.
The market is finally showing some legitimate signs of a pulse again.
Housing spending “bounces back”
The report also notes that the share of housing-related spending was 17.5 percent of the gross domestic product in the second quarter.
According to Molly Boesel, Senior Economist at CoreLogic, “The share of GDP attributable to housing services and spending on durable goods has been stable for the past decade, with the fluctuation in housing-related GDP mostly coming from residential investment,” which “made up 6.2 percent of GDP at its peak in 2005.”
Boesel adds, “Growth in residential investment has slowed dramatically in the past year, up 15.2 percent in Q2 2013, slowing to a 0.9 percent increase in Q2 2014.”
Regardless of that factor, spending is bouncing back which is welcome news to a hard hit sector.
Surge in the condo market (and why it matters to the overall market)
CoreLogic outlines that condo building construction spiked in the fourth quarter of 2014 (reaching 2,100), up 90 percent “from the trough of 1,100 in Q2 of 2012.” They’re calling it a “condo comeback.”
“Clearly the condo market is recovering in a multitude of ways, from construction volumes to price normalization, which is a good sign because condos are one of the few sources of affordable housing,” notes CoreLogic’s Deputy Chief Economist, Sam Khater.