Continued gains in employment, wage growth and historically low mortgage rates led to both month-over-month and year-over-year increases in home prices — and are likely to support home price appreciation for at least the next year, CoreLogic said today.
Releasing its Home Price Index (HPI) for August, CoreLogic said home prices nationwide increased 1.2 percent from July to August and 6.9 percent from August 2014 to the same month this year.
“Home price appreciation in cities like New York, Los Angeles, Dallas, Atlanta and San Francisco remain very strong reflecting higher demand and constrained supplies,” said Anand Nallathambi, president and CEO of CoreLogic.
Colorado and Washington saw the biggest home price increases, with prices growing 10.4 percent and 10.3 percent, respectively. Prices declined only in Mississippi, which experienced a 0.9 percent decrease, CoreLogic reported.
In addition to employment and wage gains and low mortgage rates, “an increasing number of major metropolitan areas are experiencing ever-more severe shortfalls in affordable housing due to supply constraints and higher rental costs,” Nallathambi said.
“Economic forecasts generally project higher mortgage rates and more single-family housing starts for 2016. These forces should dampen demand and augment supply, leading to a moderation in home price growth.” – Frank Nothaft, CoreLogic chief economist
These factors will likely support continued home price appreciation in 2016 — and possibly beyond, according to CoreLogic’s forecast. While CoreLogic expects little change between August and September, we could see a 4.3-percent year-over-year gain by this time next year, the company predicted.
“Economic forecasts generally project higher mortgage rates and more single-family housing starts for 2016. These forces should dampen demand and augment supply, leading to a moderation in home price growth,” said Frank Nothaft, chief economist for CoreLogic.