Home prices nationwide, including distressed sales, increased by 6.8% in the month of October when compared with one year ago, according to CoreLogic’s (CLGX) latest Home Price Index.
CoreLogic’s latest Home Price Index and HPI Forecast showed that home prices rose slightly in October over the previous month, rising 1% over September.
September’s Home Price Index was also up 0.6% compared to August.
According to CoreLogic, its Home Price Index is built on “industry-leading” public record, servicing and securities real-estate databases and incorporates more than 30 years of repeat-sales transactions for analyzing home price trends.
"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,” Nallathambi said. “This is especially true in several metropolitan areas where home prices have grown rapidly."
(Click to enlarge. Image courtesy of CoreLogic)
According to CoreLogic’s report, several metro areas have seen home prices grow by more than 6% over October 2014, including Atlanta-Sandy Springs-Roswell, Georgia; Houston-The Woodlands-Sugar Land, Texas; Los Angeles-Long Beach-Glendale, California; Phoenix-Mesa-Scottsdale, Arizona; Riverside-San Bernardino-Ontario, California; and Dallas-Plano-Irving, Texas, where home prices have risen 9.1% over October 2014.
CoreLogic’s report also showed that home prices are projected to increase by 5.2% percent on a year-over-year basis from Oct. 2015 to Oct. 2016, and the projected month-over-month gain will be just 0.1% from Oct. 2015 to Nov. 2015.
According to CoreLogic, 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%."