Soaring home prices continue to pull the real estate market into a steady recovery as the spring buying season approaches.
In February, U.S. home prices jumped 10.2 percent from the same period in the previous year, according to CoreLogic, a real estate data firm. That marks the largest annual gain in home values since March 2006, which was before the housing bubble burst.
Home prices have increased in the last 12 consecutive months when comparing year-to-year data, including a 9.7 percent gain in January and an 8.3 percent boost in December. On a monthly basis, home prices rose 0.5 percent from January to February this year — especially good news when considering the colder winter months tend to be slow.
“That’s impressive for being February,” said Mark Fleming, CoreLogic’s chief economist. “This is the off-season for housing, so prices rising this dramatically is a very good sign. Just like baseball’s Opening Day, April is opening month for the house-buying season.”
But, for now, the housing market is only showing signs of improvement.
In another heathy sign, the gains are happening in almost every state — Alabama, Delaware and Illinois being the exceptions. In Illinois, the sluggishness is attributed to a continued glut of foreclosures that is nagging the market there.
Topping February’s growth is Nevada, which saw a 19 percent increase, followed closely by Arizona at 18 percent and California with 15 percent. Rounding out the top five were Hawaii and Idaho, with 14 percent and 13 percent, respectively.
As for cities, the housing markets were particularly strong in Phoenix, Los Angeles, Atlanta and New York. Many of these markets, particularly those in Nevada, Arizona and California, were the hardest hit by the housing crisis. So as prices begin to rebound around the country, naturally, these areas are enjoying the biggest jumps.
“The rebound in prices is heavily driven by Western states,” Mr. Fleming said. “Eight of the top 10 highest appreciating large markets are in California, with Phoenix and Las Vegas rounding out the list.”
This growth comes as the Obama administration is pushing for looser lending standards from banks, so that consumers with weaker credit can also take advantage of the housing recovery and buy homes, according to news reports that surfaced this week. President Obama and his advisers want to make it easier for first-time buyers and those whose credit scores suffered due to the recession to purchase homes.
They reason that an uptick in home sales would drive the economy forward, but critics fear that this could once again lead to the practice of selling homes to people who can’t afford them.
But early 2013 is a far cry from the pinnacle of the housing marking back in April 2006 — still down about 26 percent.
Home prices are rising so quickly, Mr. Fleming said, because they were so low to begin with.
“We never really should have been that high in the first place,” Mr. Fleming explained. “It’s not supported fundamentally by income growth. Appreciation is sort of bouncing off the bottom.”