WASHINGTON -- A measure of U.S. home prices jumped 5 percent in September compared with a year ago, the largest year-over-year increase since July 2006. The gain reported by CoreLogic offered more evidence of a sustainable housing recovery.
The real estate data provider also said Tuesday that prices declined 0.3 percent in September from August, the first drop after six straight increases. The monthly figures are not seasonally adjusted. CoreLogic says the monthly decline reflects the end of the summer home-buying season and not a softening in the housing recovery.
Steady price increases should give the housing market more momentum when home sales pick up in the spring. Rising prices encourage more homeowners to sell their homes and entice would-be buyers to purchase homes before prices rise further.
Other measures have also shown healthy gains in home prices over the past year. The Standard & Poor's/Case Shiller 20-city index rose 2 percent in August compared with a year ago, a faster pace than the previous month.
The price gains in the past year reported by CoreLogic were widespread. Prices have risen in all but seven states. And they declined in only 18 out of 100 large cities that are tracked by the index.
Some of the Worst Markets See the Biggest Price Rises
Some of the biggest increases were in states that suffered the worst from the housing bust. Home prices in Arizona jumped 18.7 percent in the past year, the most of any state. Home prices in Idaho rose 13.1 percent, the second largest. Nevada's home values rose 11 percent.
Home prices jumped 22.1 percent in Phoenix, the metro area with the biggest gain. Prices in Houston rose 6.6 percent, the second-highest increase.
The states with the biggest drops were Rhode Island (3.5 percent) and Illinois (2.3 percent).
CoreLogic's price index is based on repeat sales of the same homes and tracks their price changes over time.
Several reports last month showed that the housing market is improving, though from depressed levels.
Home builders started construction on new homes and apartments at the fastest pace in more than four years in September. They also requested the most building permits in four years, a sign that many are confident that home sales gains will continue.
New home sales jumped last month to the highest annual pace in the past two and a half years. Sales of previously occupied homes dipped in September but have risen steadily in the past year.
Sales of both new and previously occupied homes are still below levels that are consistent with a healthy housing market. That's partly because the supply of available homes for sale remains low. And many prospective home buyers are struggling to qualify for a mortgage or scrape together the bigger down payments that many banks are requiring.
September's Home Price Rise Shows Biggest Gain in 6 Years, CoreLogic Reports
Home price as percentage of income: 152% Median home price: $99,000 Median family income: $65,300
Lansing is the first of five (six, if parts of the South Bend region are included) metropolitan areas located in Michigan to make this list. Home prices in the area are expected to rise by an average of 5.8 percent annually between 2012 and 2017, among the top third projected increases in the country. The median home price is just south of $99,000, or $60,000 less than the median home price in the United States.
Home price as percentage of family income: 152% Median home price: $108,000 Median family income: $70,900
The median home price in Appleton of $108,000 is higher than any metro area on this list, but it is still well below the U.S. median home price of $159,000. Home prices have consistently been cheap in the area for years. The median price between 2007 and 2012 only declined by 4.9 percent, far less than the national drop of 33.3 percent.
Home price as percentage of family income: 150% Median home price: $79,000 Median family income: $52,300
The median family income in Battle Creek of $52,300 is the 23rd lowest among all metro areas surveyed. But with home prices the third cheapest of all metro areas, buying a home is quite affordable. Home prices were relatively cheap before the economic downturn, too. Prices fell by 16.1 percent from their peak in the second quarter of 2006 to the first quarter of 2012, a far more modest decline than the nationwide home price drop of about 33 percent.
Home price as % of family income: 150% Median home price: $80,000 Median family income: $53,300
Homes in the Youngstown-Warren-Boardman area are affordable, even for those with modest incomes. While median family income in the region is $9,600 lower than the national median income, median home prices are even lower — the fifth lowest in the country.
Home price as percentage of family income: 139% Median home price: $79,000 Median family income: $56,900
Memphis is the only metropolitan area on this list not located in the Midwest. While home prices of $79,000 are the third lowest of all metropolitan areas measured, home prices are expected to rise at an annual rate of 6 percent between 2012 and 2017, more than 2 percentage points more than the national median. Home prices are expected to rise 8.6 percent next year alone, one of the biggest growth rates in the country.
Home price as percentage of family income: 133% Median home price: $95,000 Median family income: $71,600
In the Warren-Troy-Farmington Hills metro area, the combined factors of high income and low home prices can make paying for a house easy. The median family income of $71,600 is the highest on this list and nearly $20,000 higher than the nearby Detroit metro. Furthermore, the median home price of $95,000, which has fallen 40.9 percent since it reached its peak in the second quarter of 2005, means that homes have become a bargain for those who can afford to buy one in this shaky economy.
Home price as percentage of family income: 132% Median home price: $80,000 Median family income: $60,000
Median home prices in Rockford are only expected to rise by 2.4 percent in 2013, less than the 5 percent price increase expected nationally. However, between 2012 and 2017, home prices are expected to grow at an annualized rate of 4.2 percent, besting the U.S. rate of 3.9 percent.
Home price as percentage of family income: 121% Median home price: $69,000 Median family income: $57,300
The median monthly mortgage payment for a house in South Bend is only 5.52 percent of the median monthly income. This is the only metro area in the United States, besides Detroit, where mortgage payments are less than 6 percent of median income.
Home price as percentage of family income: 79% Median home price: $41,000 Median family income: $51,900
While home prices were already cheap in Detroit before the housing downturn, they became even cheaper after. Home prices between the first quarter of 2007 and the first quarter of 2012 fell a whopping 53.7 percent, or 14.3 percent annually — the 10th-largest drop of all metro areas surveyed. With a median home price that is $28,000 lower than any other metro area reviewed, a median mortgage payment is only 3.6 percent of monthly income.