NEW YORK ( TheStreet) -- Home prices rose 12.2% year-over-year in May, the biggest increase since February 2006, with a 13.2% increase projected for June, according to the latest report from CoreLogic.
On a month-over-month basis, home prices rose 2.6% in May from April. The CoreLogic Home Price Index has risen for 15 consecutive months.
Excluding sales of distressed properties -- foreclosure and short sales -- home prices rose 11.6% year-over-year and 2.3% month-over-month.
Excluding distressed sales, the five states with the highest home price appreciation were: Nevada (up 23%), California (up 18.5%), Arizona (up 14.7%), Idaho (up13.2 %) and Oregon (up 13.2 %).The recovery has been broadly based. Of the top 100 Core Based Statistical Areas measured by population, 97 showed year-over-year increases in May, up from 94 in April. Home prices have seen a sharp recovery in recent months, as investors and buyers encouraged by recovering prices have chased fewer homes, resulting in bidding wars in some cities. Home prices might rise even further in June, according to the latest report. The CoreLogic Pending HPI indicates that June 2013 home prices, including distressed sales, are expected to rise by another 13.2% on a year-over-year basis from June 2012 and rise by 2.9% on a month-over-month basis from May 2013. It is a rosy forecast, but rising mortgage rates are already threatening to slowdown the pace of price increases in the coming months. Since housing data is reported with a lag, the impact of higher rates will likely be reflected only in the July and August data. Analysts including Bank of America's Michelle Meyer believe that confidence about the housing recovery and the fact that interest rates still remain historically low will ensure that the momentum in housing continues unabated. -- Written by Shanthi Bharatwaj New York. >Contact by Email. Follow @shavenk