CoreLogic October Home Price Index Grows More Slowly
U.S. home prices rose 5.4% in October compared with the same month a year ago, according to data from research firm CoreLogic released Tuesday in the firm’s Home Price Insights monthly report. The data include sales of distressed properties.
Home prices rose 5.6% year over year and 0.4% month over month in September. The October index increase represents the slowest year-over-year growth in home prices since January 2017.
Month over month, October prices rose 0.5%, including distressed home sales. CoreLogic expects housing prices to rise by 4.8% year over year in October 2019 and to drop by 0.7% month-over-month in November 2018.
Since the housing market bottomed out in March 2011, the CoreLogic index has risen by 57.8%. As of October, home prices were 5.8% higher than they were at the April 2006 pre-crash peak. Adjusted for inflation, however, home prices were 13.5% below the April 2006 peak.
CEO Frank Martell noted:
Rising prices and interest rates have reduced home buyer activity and led to a gradual slowing in appreciation. October’s mortgage rates were the highest in seven and a half years, eroding buyer affordability. Despite higher interest rates, many renters view a home purchase as a way to build wealth through home-equity growth, especially in areas where rents are rising quickly. These include the Phoenix, Las Vegas and Orlando metro areas, where the CoreLogic Single-Family Rent Index rose 6 percent or more during the last 12 months.
Chief Economist Frank Nothaft added:
Homeownership remains an important part of the American dream. Our research found that being a homeowner makes consumers feel safe in their homes. Renters really want something to call their own. However, until affordability comes back into balance, renters will have a hard time purchasing a home.
Including distressed sales, home prices rose the most year over year in Nevada (12.8%) and Idaho (11.9%).
Through September, 35% of the top 100 metropolitan areas were overvalued, 24% were undervalued and 41% were at value. When looking at only the top 50 markets based on housing stock, about 44% were overvalued, 16% were undervalued and 41% were at value. CoreLogic defines an overvalued housing market as one in which home prices are at least 10% higher than the long-term, sustainable level, while an undervalued housing market is one in which home prices are at least 10% below the sustainable level.
Among U.S. metro areas, Las Vegas has posted the largest year-over-year index gain, up 12.6%. Seattle was up 8.3%, with Denver (7.1%), Los Angeles (5.9%) and Boston (4.9%) rounding out the top five.
See CoreLogic’s October report for more detail.