Prices of homes in the United States are expected to increase by 6 percent in the next 12 months, a latest data revealed.
The latest index data from property analysis firm CoreLogic reported that home prices rose by 8.8 percent on a year-on-year basis in May. Prices rose for 27 months in a row. The data also shows that month-on-month prices were up 1.4 percent in May as compared with April.
No price decline was reported in any of the states in May 2014; and 25 states and the District of Columbia were at or within 10 percent of their peak home price appreciation.
New highs were recorded in Alaska, Louisiana, Oklahoma, Nebraska, Iowa, South Dakota, North Dakota, Colorado, Texas and New York. The strongest year-on-year appreciation was in the West, led by Hawaii, California and Nevada, the data showed.
The overall prices of houses in the U.S. increased 8.1 percent in May 2014, excluding distressed sales. The forecast by the firm showed that home prices including distressed sales are projected to increase 0.8 percent month-on-month from May 2014 to June 2014 and 6 percent year-on-year.
If distressed sales were kept out, home prices are expected to rise 0.7 percent month-on-month from May 2014 to June 2014 and by 5.1 percent year-on-year.
"The pace of home price appreciation is cooling off quickly as the weather warms up. May's 8.8% year on year growth rate is down almost 3% from just three months ago," said Mark Fleming, chief economist for CoreLogic.
"The influences of modestly rising inventory and less than expected demand are causing price growth to moderate toward our forecasted expectations," he added.
The fact that home prices are continuing to climb across most parts of the country has both, positive and negative, implications for the housing market, according to Anand Nallathambi, president and chief executive officer of CoreLogic.
"While the rapid rise in prices over the past two years has lifted many home owners out of negative equity, it has also become a negative factor in buying decisions for prospective purchasers weighing affordability concerns. As we move ahead, a moderation in home price increases over the next 12 months should help cool things down a bit and keep the housing recovery going," he explained.
