CoreLogic - US Home Prices Up 6.8 Percent Year Over Year in October

Forecast Projects Increase of 5.2 Percent by October 2016

Home prices nationwide, including distressed sales, increased by 6.8 percent in October 2015 compared with October 2014 and increased by 1.0 percent in October 2015 compared with September 2015, according to the CoreLogic HPI.

The CoreLogic HPI Forecast indicates that home prices are projected to increase by 5.2 percent on a year-over-year basis from October 2015 to October 2016, and the projected month-over-month gain is negligible (0.1 percent) from October 2015 to November 2015. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“Many markets have experienced a low inventory of homes for sale along with strong buyer demand, which is sustaining upward pressure on home prices. These conditions are likely to persist as we enter 2016,” said Dr. Frank Nothaft, chief economist for CoreLogic. “A year from now, as we finish out October 2016, we expect the CoreLogic national Home Price Index appreciation to slow to 5.2 percent.”

“The rise in home prices over the past few years has largely been a healthy trend. The shadow inventory has been reduced significantly and home equity levels are now approaching pre-recession levels,” said Anand Nallathambi, president and CEO of CoreLogic. “As we move forward, the rise in home prices will need to be better correlated to family income trends over time to avoid homes becoming unaffordable for many. This is especially true in several metropolitan areas where home prices have grown rapidly.”

Among those areas with rapid price increases the Dallas-Plano-Irving metro area made the largest gains with an annual appreciation of 9.1 percent. Phoenix, Houston, and Los Angeles followed, each with gains of 6.8-6.9 percent.