After nearly two years of oversize gains, home prices are finally starting to slow toward a more sustainable pace. Many states are still experiencing home prices that are below their peaks made during the housing bubble, but 10 states have already surpassed their previous peaks.
Home prices increased 8.8 percent in May, marking the 27th consecutive month of year-over-year gains, according to the latest reading from CoreLogic’s Home Price Index. In fact, 94 of the top 100 metro areas showed year-over-year increases in May, lead by Riverside-San Bernardino-Ontario and Los Angeles-Long Beach-Glendale in California. In comparison, prices surged 11.8 percent on an annual basis in February.
“Home prices are continuing to climb across most of the country, which has both positive and negative implications for the housing market,” said Anand Nallathambi, president and chief executive officer of CoreLogic. “While the rapid rise in prices over the past two years has lifted many homeowners 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.”
Every state in the nation has posted price gains over the past 12 months. California and Hawaii have logged the biggest gains, at 13.1 percent and 13.2 percent, respectively. However, they are still below their peaks made during the housing bubble. Let’s take a look at 10 states where home prices have recaptured their bubble peaks.