Us house prices see first double digit rise since 2006

The valuation firm’s latest report found that US property jumped 10.2 per cent in August 2013 from last year – the largest annual price growth since the middle of 2006.

While the numbers recall the height of the housing bubble, though, concerns that the market is following to a similar crash have been quickly dismissed.  Indeed, the market is very different compared to the last peak, with prices still 32.5 per cent off their previous highs. The lower end of the market, meanwhile, saw quarterly increases of just 2 per cent, the lowest since April 2012, suggesting that the sector that kickstarted the current wave of recovery has already entered moderation.

“With the continued strengthening of home price trends in August, the need for perspective on market activity is even more important,” said Dr. Alex Villacorta, vice president of research and analytics at Clear Capital.

“National yearly gains surpassed 10.0% for the first reported time since the peak of the market in mid 2006. Certainly these trends are exciting, particularly against the backdrop of the seemingly endless housing market woes following 2006. It’s been a long, hard road and it’s difficult not to celebrate double digit price growth.”

Villcorta added: “It’s important, however, to note a few sub-surface trends that signal these gains will likely subside over the coming months. Average quarterly gains in the top performing 15 major metros signal moderation is already underway, when annualized and compared to current yearly growth.”

He continued to predict that the moderation in the low end of the market will “likely filter through” to the rest of the housing market, a movement encouraged by the arrival of the slower winter season.

“That’s not to say the recovery is slated to stall,” he noted. “Growth patterns are likely to return to more historical rates of growth rather than align with bubble-like growth.”