U.S. home prices rose 3.5% in September, compared with the same month a year ago, according to CoreLogic’s latest Home Price Insights monthly report, released Tuesday. The data includes sales of distressed properties.
Home prices rose 0.4% month over month in September. On a year-over-year basis, the index has increased every month since February 2012 and is up 62% since bottoming out in March 2011.
CoreLogic forecasts housing prices to rise by 0.3% month over month in October and by 5.6% year over year in September 2020.
As of September 2019, home prices were about 9% higher than they were at the April 2006 pre-crash peak. Adjusted for inflation, however, home prices remain about 11.2% below the peak.
CEO Frank Martell noted:
All 50 states posted positive home price trends in September with the average price nationally rising 3.5%. As a group, more millennials are entering the home-buying market and they report spending more money than they anticipated. This may impact their future financial planning. Millennials age 30-38 put down less than 20% for a down payment over the past three years and used funds from their retirement accounts to cover an average of 7% of that down payment.
CoreLogic Chief Economist Frank Nothaft added:
Mortgage rates were a full percentage point lower this September compared to a year ago, boosting affordability for first-time buyers and supporting a rise in homeownership. In addition to lower interest rates, personal income grew faster than home prices during the past year. This provided an additional lift for first-time buyer affordability and helped to boost the homeownership rate to the highest level in more than five years.
Including distressed sales, home prices rose the most year over year in Idaho (11.8%), Utah (8.0%) and Maine (8.0%). Year over year, home prices rose in every state.
Through September, 36% of the top 100 metropolitan areas were overvalued, 23% were undervalued and 41% were at value. In just the top 50 markets based on housing stock, 40% were overvalued, 16% were undervalued and 44% 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, Washington, D.C., posted the largest year-over-year index change, up 3.5% in September. Denver prices rose 3.4% and Las Vegas prices rose 3.2%, followed by Miami and Boston, both up 2.8%, to round out the top five.
See CoreLogic’s full September report for more detail.