"Potent Cocktail" Fueling Home Prices -CoreLogic

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Home price growth accelerated further in
October according to CoreLogic.  The
company’s Home Price Index (HPI) increased 6.7 percent from the prior October
while the year-over-year gain in September was only 6.3 percent.   The
CoreLogic index includes both market and distressed sales.

On a month-over-month basis, home prices
were up 1.1 percent.  This is the same
rate of increase that CoreLogic has reported for every month since June.

 

 

The company’s chief economist Frank Nothaft said the
nation’s price growth rate was not shared by all. “While national home prices
increased 6.7 percent, only nine states had home price growth at the same rate
of growth or higher than the national average,” he said.  “The largest states, such as Texas, Florida
and California, are experiencing high rates of home price appreciation.”

The CoreLogic HPI Forecast projects
that home prices will increase by 4.6 percent on a year-over-year basis from
October 2016 to October 2017, and will rise by 0.2 from October to November
2016. 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.  Last month’s
forecast had expected prices to rise by 0.3 percent from September to October.

“Home prices are continuing to
soar across much of the U.S. led by major metro areas such as Boston, Los
Angeles, Miami and Denver. Prices are being fueled by a potent cocktail of high
demand
, low inventories and historically low interest rates,” said Anand
Nallathambi, president and CEO of CoreLogic. “Looking forward to next
year, nationwide home prices are expected to climb another 5 percent in many
parts of the country to levels approaching the pre-recession peak.”

Price appreciation was once again strongest
in the West
with the greatest annual change posted in Washington at 10.5
percent, the only state still posting a double-digit gain.  The other states with outsized increases were
Oregon (9.9 percent), Idaho (8.5 percent), Colorado (8.4 percent), and Utah
(8.0 percent).

Prices declined on an annual basis
in Connecticut, down 0.7 percent, while Alaska eked out 0.5 percent
growth.  Other states with increases well
below the national average were Oklahoma (1.1 percent), New Jersey (1.2
percent), and Wyoming (1.7 percent).

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