CoreLogic: Home price growth "clearly slowing"
Housing markets put weak mid-year behind them
Home prices, including distressed sales, grew by 5.6% in September compared to a year ago, marking 31 months of straight consecutive year-over-year increases in homes prices nationally, CoreLogic’s home price index revealed.
On a monthly basis, home prices slightly dipped by 0.1% in September compared to August.
To put it into perspective, August recorded a 6.4% increase year-over-year and a 0.3% month-over-month increase.
“The month-on-month increase in house prices in September suggests that the housing market is putting the very weak mid-year period behind it. But underlying rates of house price appreciation are still slowing, and with mortgage demand stagnating, there are few signs of an imminent pick-up,” Capital Economic said.
At the state level, including distressed sales, all states showed year-over-year home price appreciation in September, with two of those states, Michigan and Montana, showing double-digit year-over-year growth.
Twenty-eight states and the District of Columbia were at or within 10% of their home price peak, while five states, Colorado, Nebraska, North Dakota, South Dakota and Texas, reached new HPI highs.
Excluding distressed sales, home prices nationally increased 5.2% in September 2014 compared to September 2013 and 0.1% month over month compared to August 2014. And excluding distressed sales, 49 states and the District of Columbia showed year-over-year home price appreciation in August. Mississippi was the only state to experience a year-over-year decline (-0.9%).
“There has been a clear bifurcation in home price growth for lower-end versus upper-end properties in 2014,” said Sam Khater, deputy chief economist at CoreLogic. “As of December 2013, both lower-end and upper-end property prices were up 9.7 percent on a year over year basis. As of September, lower-end prices were up 9.4 percent but upper-end prices were up only 4.5 percent.”
Looking ahead, CoreLogic estimates that homes prices, including distressed sales, will increase 0.1% month over month from September 2014 to October 2014 and, on a year-over-year basis, by 5% from September 2014 to September 2015.
“Home prices continue to rise compared with this time last year but the rate of growth is clearly slowing as we exit 2014,” said Anand Nallathambi, president and CEO of CoreLogic. “With more positive macro-economic trends emerging in the U.S., we are forecasting moderate price growth for 2015.”