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Home Prices Rise, Credit Availability Stays Tight

Phil Hall
Sep 01, 2015
Home prices took a 5.7 percent year-over-year spike in June, according to new data from CoreLogic

Home prices are enjoying a substantial rise, but mortgage credit is getting significantly harder to obtain, according to the latest housing data reports.

CoreLogic’s Home Price Index (HPI) for July found home prices nationwide, including distressed sales, increasing by 6.9 percent on a year-over-year basis and 1.7 percent on a month-over-month basis. Excluding distressed sales, home prices increased by 6.7 percent in July on a year-over-year basis and increased by 1.5 percent from June. CoreLogic is forecasting scant month-over-month increased from July to August and a healthier year-over-year increase to July 2016 on home prices.

Including distressed sales, the five states with the highest home price appreciation were: Colorado (10.4 percent), Washington (9.9 percent), Nevada (9.1 percent), Hawaii (8.9 percent) and Oregon (8.8 percent).  Excluding distressed sales, the five states with the highest home price appreciation were: Colorado (10.1 percent), Washington (9.5 percent), Nevada (9.1 percent), Oregon (9.1 percent) and New York (9 percent). Only five of the top 100 Core Based Statistical Areas measured by population showed year-over-year declines: Maryland’s Baltimore-Columbia-Towson region (-0.3 percent); Boston (-3.8 percent); the neighboring markets New Haven and Milford, Conn. (-1.9 percent); Louisiana’s New Orleans-Metairie corridor (-4.9 percent) and Worcester, Mass. (-7.2 percent).

"Low mortgage rates and stronger consumer confidence are supporting a resurgence in home sales of late," said Anand Nallathambi, president and CEO of CoreLogic. "Adding to overall housing demand is the benefit of a better labor market which has provided millennials the financial independence to form new households and escape ever rising rental costs."

While home prices were on the rise, the ability for would-be homeowners to secure a mortgage became more difficult in the first quarter, according to the latest Zillow Mortgage Access Index report that found mortgage credit availability was almost unchanged from a year ago.

"Recent market volatility is causing some lenders to be more cautious in their underwriting," said Zillow Chief Economist Svenja Gudell. "Tighter mortgage access will make it harder for people with low credit scores to get a home loan, and even people who can get approved for a mortgage will have fewer options in terms of available mortgage products." 

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