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Home Prices Continue Steady Climb, More Gains Forecasted for 2016

Home price growth had been firing on all cylinders as 2015 drew to a close, and that was evident in November, where prices continued their steady climb, according to new housing data from CoreLogic.

Nationwide, home prices increased 6.3% year-over-year in November 2015 and rose 0.5% on a monthly basis from October, according to the CoreLogic Home Price Index (HPI).

“Heading into 2016, home price growth remains in its sweet spot as prices have increased between 5 and 6 percent on a year-over-year basis for 16 consecutive months,” said CoreLogic Chief Economist Dr. Frank Nothaft in a written statement. “Regionally, we are beginning to see fissures, with slowdowns in some Texas or California markets, but the northwest and southeast remain on solid footing.”

Widespread growth in home prices has reverberated throughout the nation’s major metro areas in the last few months of 2015, with values rising upwards of 5% in October, as noted by a recent S&P/Case Shiller index.

Looking ahead, similar price gains may continue over the course of this year. The CoreLogic HPI Forecast indicates that home prices will increase by 5.4% on a year-over-year basis in November 2016 compared to the same month last year.

The 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.

On a monthly basis from November 2016 to December 2016, the HPI Forecast expects home prices to remain flat.

“Many factors, including strong demand and tight supply in many markets, are contributing to the long-sustained boom in prices and home equity which is a very good thing for those owning homes,” said CoreLogic President and CEO Anand Nallathambi in a prepared statement. “On the flip side, prices have outstripped incomes for several years in a number of regions so, as we enter 2016, affordability is becoming more of a constraint on sales in some markets.”

Written by Jason Oliva

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