Home prices increased in September year-over-year and month-over-month, a trend that brought home equity wealth significantly higher over last five years, according to the latest Home Price Index and HPI Forecast released by CoreLogic.
Home prices, including prices on distressed sales, increased 6.3% from last September, and 1.1% from August 2016, according to the HPI.
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“Home-equity wealth has doubled during the last five years to $13 trillion, largely because of the recovery in home prices,” CoreLogic Chief Economist Frank Nothaft said. “Nationwide during the past year, the average gain in housing wealth was about $11,000 per homeowner, but with wide geographic variation.”
Going into next year, CoreLogic predicts that home prices will only continue to rise, with the company estimating an increase of 5.2% from September 2016 to September 2017. Monthly, home prices are expected to increase 0.3%.
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.
“Home-price growth creates wealth for owners with home equity,” CoreLogic President and CEO Anand Nallathambi said. “A 5% rise in home values over the next year would create another $1 trillion in home-equity wealth for homeowners.”
While home-price growth is great news for homeowners and sellers, potential homebuyers continue to struggle in the midst of these rising home prices and low inventory. Still, with other economic factors taken into account, one economist thinks affordability is still better than it has been in years. Click here to read more about that.