Despite a quarter-over-quarter gain of 4.1%, national home prices are still down over the entire year, according to the Clear Capital Home Data Index Market Report.
Home prices are 7.9% lower since June 2010 and 1.8% less than June 2009, the report said. The data provider said record low prices this past winter contributed to the overall downfall in home values.
All four regions nationwide experienced quarterly gains for the first time without any tax credit stimulus since 2006, led by the Midwest at 6.3%. The Northeast had the second highest quarter-over-quarter home price increase at 5.2%, followed by the South at 4.2% and the West at 0.7%.
“Building off last month's minimal quarterly gains, prices continue to correct from winter's extended declines,” said Dr. Alex Villacorta, director of research and analytics at Clear Capital. “Although this is encouraging, many markets are still near, or at record lows as REO saturation remains a significant proportion of all sales activity.”
Even though REO saturation rates are slowly improving, now at 28%, which is down nearly 6% from the previous quarter, more than one-in-four home sales across the country remain distressed. In the top 15 highest performing markets, REO saturation averaged 22.7%, while the lowest 15 performing markets had an REO saturation rate of 33.3% despite an average decline of 3.3% from last month.
“Elevated distressed home sale activity continues to take a toll on the lowest performing markets across the country,” Clear Capital said in its report. “On a more positive note, prices, while still down for the year, have also slowed their decline. More than half of these lowest performing markets now maintain single digit yearly declines, which reflect a modest improvement as a whole.”