Home Prices Still Rising, But Pace Slows
September's home prices showed year-over-year appreciation in every state, but signaled a slowdown as earlier double-digit increases have faded to more modest single-digit increases, according to CoreLogic’s Home Price Index for the month.
Michigan and Montana were the only two states to record double-digit growth year over year, at 10.3 percent and 10 percent, respectively.
Twenty-eight states, as well as the District of Columbia, were at or within 10 percent of their home price peak, according to the index, which reflects distressed and nondistressed sales.
Five states' home prices also reached new highs: Colorado, Nebraska, North Dakota, South Dakota, and Texas.
On a national scale, “home prices continue to rise compared with this time last year, but the rate of growth is clearly slowing as we exit 2014,” says Anand Nallathambi, president and CEO of CoreLogic. “With more positive macroeconomic trends emerging in the United States, we are forecasting moderate price growth for 2015.”
Overall, home prices nationwide, including distressed sales, rose 5.6 percent in September year over year, according to CoreLogic’s index. Nationally, year-over-year home prices have risen 31 consecutive months, but the national average is no longer posting double-digit increases.
CoreLogic forecasters project home prices to increase 5 percent on a year-over-year basis by September 2015.
Lower-end properties are expected to continue to see some of the biggest price growth.
“There has been a clear bifurcation in home price growth for lower-end versus upper-end properties in 2014,” says Sam Khater, deputy chief economist at CoreLogic. “As of December 2013, both lower-end and upper-end property prices were up 9.7 percent on a year-over-year basis. As of September, lower-end prices were up 9.4 percent but upper-end prices were up only 4.5 percent.”
The following five states had the highest home appreciation in September, including distressed sales:
- Michigan: +10.3%
- Montana: +10%
- Maine: +9.6%
- Massachusetts: +8.8%
- California: +8.5%
Lawerence Yun, the National Association of REALTORS®’ chief economist, will present NAR’s 2015 economic and housing outlook and forecast on Nov. 7 during the 2014 REALTORS® Conference & Expo in New Orleans. At the event, Mel Watt, the director of the Federal Housing Finance Agency, will join Yun to discuss his perspective on the current housing market, the challenges facing consumers, and the housing market recovery.