CoreLogic: Home prices moderate into late fall
Housing recovery boosted by strong industry reports
Home prices, including distressed sales, ticked up by 6.1% in October compared to a year ago, representing 32 months of consecutive year-over-year increases in home prices nationally, the latest CoreLogic home price index said.
Month-over-month, home prices nationwide, including distressed sales, grew by 0.5% in October 2014 compared to September 2014.
This increase is not too far off from September’s 5.6% and 6.4%.
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“October’s CoreLogic index does not fundamentally alter the picture of moderating house price pressures. And with housing more or less fairly valued, and the cost of borrowing set to rise, a period in which prices move broadly in line with incomes now seems to lie ahead,” Capital Economics said.
At the state level, including distressed sales, all states showed year-over-year home-price appreciation in October, with 27 states and the District of Columbia at or within 10% of their home price peak.
The HPI reached new highs in nine states: Colorado, Louisiana, Nebraska, New York, North Dakota, South Dakota, Tennessee, Texas and Wyoming.
Excluding distressed sales, home prices nationally escalated by 5.6% in October and 0.6% month-over-month compared to September 2014. Mississippi was the only state to experience a year-over-year decline (-1.2%) when excluding distressed sales.
“Home price growth is moderating as we head into the late fall and is currently running at half the pace it was in the spring of 2014,” said Sam Khater, deputy chief economist at CoreLogic. “However, there are still pockets of strength, especially in several Texas markets, as well as Seattle, Denver and other markets with strong economic fundamentals.”
And this trend is only expected to continue. Home prices, including distressed sales, are forecasted to increase 0.2% month over month from October 2014 to November 2014 and, on a year-over-year basis, by 5.1% from October 2014 to October 2015.
Excluding distressed sales, home prices are expected to rise 0.2% month over month from October 2014 to November 2014 and by 4.7% year over year from October 2014 to October 2015.
“The gradual recovery of the housing market continues to be propelled by improving employment, more buyer and seller confidence, continued low rates and, in certain parts of the country, investor demand. The continued actual and projected rise in home prices confirms that fact,” said Anand Nallathambi, president and CEO of CoreLogic. “Based on our projections, home prices in over half the country will have reached or surpassed levels last seen at the height of the housing bubble sometime in mid-2015.”