Home prices continue to climb both year-over-year and month-over-month, according to the October 2017 Home Price Index (HPI) released by CoreLogic Tuesday Morning.
Nationally, prices increased by 7 percent from October 2016 to October 2017—representing the second consecutive month of 7 percent year-over-year increases. Meanwhile, month-over-month home prices increased by 0.9 percent in October 2017 compared with September 2017.
Highlighting metro markets—specifically, if average housing stocks are overvalued, undervalued, or at value—the data found that 37 percent of the top 100 metropolitan areas were overvalued, with 26 percent undervalued, and 37 percent at value.
When looking at the top 50 markets based on housing stock, 50 percent were overvalued, 14 percent were undervalued, and 36 percent were at value.
“The acceleration in home prices is good news for both homeowners and the economy because it leads to higher home equity balances that support consumer spending and is a cushion against mortgage risk,” said President and CEO of CoreLogic Frank Martell.
Martell explained that for entry-level renters and first-time homebuyers, however, it leads to tougher affordability challenges. In fact, according to the CoreLogic’s Single-Family Rent Index, rents paid by entry-level renters for single-family homes experienced an increase of 4.2 percent from October 2016 to October 2017, compared with overall single-family rent growth of 2.7 percent over the same time.
“Single-family residential sales and prices continued to heat up in October,” said Dr. Frank Nothaft, Chief Economist for CoreLogic. “On a year-over-year basis, home prices grew in excess of 6 percent for four consecutive months ending in October, the longest such streak since June 2014. This escalation in home prices reflects both the acute lack of supply and the strengthening economy.”
Look ahead by utilizing values derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state—CoreLogic projects prices to increase year-over-year by 4.2 percent by October 2018.
To view the full report, click here.