IRVINE, CA-Western housing recovery continues to top charts. According to the Federal Housing Finance Agency, the top five states in terms of annual appreciation were Nevada, California, Arizona, Oregon and the District of Columbia, reports Auction.com Research.

Nevada, California and Arizona were among the three states hardest hit by the housing bust, and thus home prices are increasing off of a lower base, according to the firm. The seasonally adjusted home price index rose in 47 states and the District of Columbia during the second quarter.

On a metro level, Auction.com reports that Stockton, CA, saw the largest second-quarter price increase, rising 7.3% from the quarter prior and 19.4% from a year ago. Phoenix and Las Vegas, two long-struggling housing markets, saw the second and third strongest annual price appreciation; prices in Phoenix rose 5.2% from the first quarter and 18.5% from one year ago, while Las Vegas home prices grew 7.1% from the quarter prior and 17.6% from a year ago. Prices were weakest in Akron, OH, where prices fell 3.9% from the first quarter.

Meanwhile, US home prices on the whole have risen both from the first quarter of the year and over a year ago, according to Auction.com Research.

“The FHFA released its second-quarter home price index, reporting that US home prices rose 2.1% on a seasonally adjusted basis form the first quarter,” says Julie Zisfein, senior associate with Auction.com Research. “Further, the index rose 7.2% over the past year, the strongest annual growth since early 2008. According to the index, US home prices are now 10.6% off their 2011 trough but still remain 12% off their 2007 peak at the height of the housing bubble.”

Despite the encouraging news, some questions have been raised about the role of appraisals in slowing the recovery of some of the markets harder hit by the housing crisis. As GlobeSt.com reported earlier this week, the growing disconnect between purchase-only and all-transactions home price indices as shown by FHFA research may be making obtaining a mortgage more difficult in some markets, reports CBRE. The firm studied the year-over-year percent change in the indices and discovered that purchase-only indices paint a much rosier picture of home price gains than all-transactions indices, which are heavily weighted by appraisals from refinancings—these make up nearly 70% of all mortgage transactions.

But these claims were challenged by Richard Borges II, president of the Chicago-based Appraisal Institute, who disagrees that appraisers may be delaying the US housing recovery by underestimating home values. “Appraisers, particularly designated members of the Appraisal Institute, are supposed to be reflecting what's happening in the market,” Borges told GlobeSt.com. “They are neither making the market nor confirming sale prices for the sole purpose of confirming sale prices or confirming amounts for the sole purpose of granting a mortgage.”

Auction.com also reports that after an encouraging existing home sales report last week, FHFA's report supports a continued housing recovery at a time when many housing indicators are pointing in different directions. “We nevertheless caution that the underlying demand factors for housing have ebbed recently, and the recent sales data was boosted by households rushing to close in the fact of higher mortgage rates, so coming months could be softer than the current indicators,” says Zisfein.

Instant Insights /

Western States Hold Best Price Gains

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