CoreLogic’s Home Price Index (HPI) posted its largest annual increase in nearly seven years in February.

When including distressed sales (short sales and REOtransactions), home prices in February increased by 10.2 percent from February 2012, the data provider reported Wednesday. The annual gain marks the largest increase since March 2006. From January to February, prices still moved in a positive direction, but rose by just 0.5 percent.

“Nationally, home prices improved at the best rate since mid-2006, marking a full year of annual increases and underscoring the ongoing strengthening of market fundamentals,” said Anand Nallathambi, president andCEO of

CoreLogic. “Continued home price appreciation will provide fuel needed to drive further recovery in the home purchase market.”

Furthermore, CoreLogic’s Pending HPI projects another 10.2 percent year-over-year increase. From February to March, prices are expected to rise by 1.2 percent.

In February, only three states experienced year-over-year price declines: Delaware (-4.4 percent), Alabama (-1.5 percent), and Illinois (-1.0 percent).

The five states where prices improved the most during the same time period were Nevada (+19.3 percent), Arizona (+18.6 percent), California (+15.3 percent), Hawaii (+14.6 percent), and Idaho (+13.5 percent).

“The rebound in prices is heavily driven by western states. Eight of the top ten highest appreciating large markets are in California, with Phoenix and Las Vegas rounding out the list,” said Dr. Mark Fleming, chief economist for CoreLogic.

Among the largest metros, Phoenix posted the largest year-over-year increase at 20.8 percent. Other metros that posted double-digit increases included Los Angeles (+14.5 percent), Riverside (+13.2 percent), and Atlanta (+12.4 percent). 

by Esther Cho