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National home prices seem to be picking up steam, while all four regions posted price gains, ""Clear Capital"":http://www.clearcapital.com/ reported Tuesday.
[IMAGE]On a quarterly basis, home prices increased 2 percent in July, and year-over-year, the increase was even greater at 2.2 percent.
The yearly increase is 0.5 percentage points higher than June's yearly gain and the strongest in nearly two years. Clear Capital mainly attributed the growth to the 6.2 percent yearly gain in the West.
Among the four regions, the West also reported the biggest quarterly gain at 4.4 percent. The Midwest saw an increase of 2.1 percent quarter-over-quarter, the South 1.5 percent, and the Northeast 0.4 percent.
While a reduction in distressed sales is generally thought to increase home prices, in the Northeast, the drop in REO saturation actually contributed to the weaker quarterly gain in the region, according to Clear Capital. REO saturation fell 3 percentage points to 7.7 percent, which slowed down momentum for low tier gains (homes selling for $169,000 and less), Clear Capital explained. With less distressed properties to sell, the Northeast will need to rely more on mid-tier and higher priced homes for price increases.
In the West, buyers are shifting focus from homes priced $140,000 and less to homes selling for greater than $347,000. Clear Capital stated this migration points to a more broad-based demand, which is needed for a mature recovery.
""While significant risks remain at large, housing now has the potential to enter a positive feedback loop,"" said Dr. Alex Villacorta, Director of Research and Analytics at Clear Capital. ""Price increases could lead to increased confidence. This could motivate buyers, propelling the recovery in spite of the potential economic slowdown outside the housing market. Of course it's still possible that housing could experience a pull back if contagion from other economic sectors bleeds through, but right now there appears to be a healthy level of resilience.""
*Top Five Performing Markets*
_(Based on quarterly gains)_
1. Birmingham-Hoover, Alabama (+16.7%)
2. Milwaukee-Waukesha-West Allis, Wisconsin (+15.8%)
3. Seattle-Tacoma-Bellevue, Washington (+10.5%)
4. Louisville, Kentucky (+8.9 percent)
5. Phoenix-Mesaâ€"Scottsdale, Arizona (+8.1%)
*Lowest Performing Markets*
_(Based on quarterly gains)_
1. Memphis, Tennessee (-5.5%)
2. Honolulu, Hawaii ( -3.1%)
3. Dayton, Ohio (-2.7%)
4. Providence, Rhode Island-New Bedford-Fall River, Massachusetts (-2.0%)
5. Raleigh-Cary, North Carolina (-1.6%)
Clear Capital is a provider of data and solutions for real estate asset valuation and risk assessment for large financial services companies.
