Published: Monday, 14 Jan 2013 | 11:36 AM ET
By: Julie Schmit, USA TODAY
Home prices rose 7.5 percent last year, their largest increase in six years, and will rise six percent in 2013, market researcher CoreLogic predicts in a report on Monday.
The same forces that helped propel prices last year will be in play this year, including improved housing demand fueled by good affordability, fewer foreclosed homes for sale and a low inventory of unsold homes, the company says.
Prices were helped last year by fewer distressed home sales. Sales of bank-owned homes fell more than 20 percent to 600,000, CoreLogic says.
Earlier last year, some real estate analysts expected a flood of foreclosed homes to hit the market after five major lenders reached a settlement over foreclosure practices with state and federal officials. That didn't happen.
Short sales also made up more of the overall home sales last year, accounting for 23 percent. That's the highest level since the real estate downturn began, CoreLogic says. A short sale is when banks allow a house to be sold for less than what's owed on the mortgage loan. Rising home prices should encourage more sellers to list their homes for sale, CoreLogic says. The supply of homes for sale fell to 4.8 months in November, the National Association of Realtors says. That's the lowest level in more than seven years. Realtors consider a six-month supply to be a balanced market between buyers and sellers.
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