CoreLogic Reports October Home Prices Increased by 5.4 Percent Year Over Year

  • Home price growth projected to slow to 4.8 percent by October 2019
  • October marked the fourth consecutive month of annual HPI growth below 6 percent
  • According to CoreLogic and RTi Research, renters still want to buy a home to have something to call their own despite high prices
  • North Dakota was the only state to show a year-over-year decline in prices this month, while West Virginia, Nevada and Idaho showed double-digit growth

IRVINE, Calif. — (BUSINESS WIRE) — December 4, 2018 — CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released the CoreLogic Home Price Index (HPI) and HPI Forecast for October 2018, which shows home prices rose both year over year and month over month. Home prices increased nationally by 5.4 percent year over year from October 2017. On a month-over-month basis, prices increased by 0.5 percent in October 2018. ( September 2018 data was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results each month.)

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20181204005248/en/

CoreLogic National Home Price Change; October 2018.  (Graphic: Business Wire)

CoreLogic National Home Price Change; October 2018. (Graphic: Business Wire)

Looking ahead, the CoreLogic HPI Forecast indicates home prices will increase by 4.8 percent on a year-over-year basis from October 2018 to October 2019. On a month-over-month basis, home prices are expected to decrease by 0.7 percent from October to November 2018. The CoreLogic HPI Forecast is a projection of home prices calculated 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.

“Rising prices and interest rates have reduced home buyer activity and led to a gradual slowing in appreciation,” said Dr. Frank Nothaft, chief economist for CoreLogic. “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.”

According to the CoreLogic Market Condition Indicators (MCI), an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock, 35 percent of metropolitan areas have an overvalued housing market as of October 2018. The MCI analysis categorizes home prices in individual markets as undervalued, at value or overvalued, by comparing home prices to their long-run, sustainable levels, which are supported by local market fundamentals (such as disposable income). Additionally, as of October 2018, 24 percent of the top 100 metropolitan areas were undervalued, and 41 percent were at value.

When looking at only the top 50 markets based on housing stock, 44 percent were overvalued, 16 percent were undervalued, and 40 percent were at value. The MCI analysis defines an overvalued housing market as one in which home prices are at least 10 percent above the long-term, sustainable level. An undervalued housing market is one in which home prices are at least 10 percent below the sustainable level.

In 2018, CoreLogic together with RTi Research of Norwalk, Connecticut, conducted an extensive consumer housing sentiment study, combining consumer and property insights. The study assessed attitudes toward homeownership and the drivers of the home buying or renting decision-making process. When asked about the important aspects of homeownership, owners cited “a place to feel safe” as very important and said that having something to call their own was the most important factor. Additionally, both renters and owners felt a home is an investment and a place to raise a family and counted those factors among the top reasons to own a home.

“Homeownership remains an important part of the American dream,” said Frank Martell, president and CEO of CoreLogic. “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.”

The next CoreLogic HPI press release, featuring November 2018 data, will be issued on Wednesday, January 2, 2019 at 8:00 a.m. ET (this is one day later than routine delivery due to the federally observed holiday on Tuesday).

Methodology

The CoreLogic HPI is built on industry-leading public record, servicing and securities real-estate databases and incorporates more than 40 years of repeat-sales transactions for analyzing home price trends. Generally released on the first Tuesday of each month with an average five-week lag, the CoreLogic HPI is designed to provide an early indication of home price trends by market segment and for the “Single-Family Combined” tier, representing the most comprehensive set of properties, including all sales for single-family attached and single-family detached properties. The indices are fully revised with each release and employ techniques to signal turning points sooner. The CoreLogic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.

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