According to CoreLogic’s latest Home Price Insights report, U.S. home prices, including distressed-property sales, grew by 3.5% year over year in October.
That figure was unchanged from the prior month and is consistent with much of the first 10 months of 2019. Since this past March, annual home-price increases have grown between 3.4% and 3.7%, per CoreLogic data. On a month-over-month basis, nationwide home prices increased by 0.5% between September and October of this year.
“Interestingly, this persistent increase in home prices isn’t deterring older millennials,” said Frank Martell, president and CEO of CoreLogic. “In fact, 25% of those surveyed anticipate purchasing a home over the next six to eight months.”
Additionally, three out of four millennials in the same survey — conducted in conjunction with RTi research during the second quarter of this year — reported feeling confident that they would qualify for a mortgage under their current financial situation.
Also of note is the deviation in home-price growth between various U.S. metro areas, said Frank Nothaft, CoreLogic’s chief economist. Although every state posted an annual home-price increase this past October — led by Idaho at 10.9%, Maine at 7.5% and Indiana at 7.1% — pockets of decelerating prices are scattered nationwide.
“Local home-price growth can deviate widely from the change in our U.S. index,” Nothaft said. “While we saw prices up 3.5% nationally [compared to] last year, home prices also declined in 22 metropolitan areas. Price softness occurred in some high-cost urban areas and in metros with weak employment growth during the past year.”
Several metros across the country remain overvalued, according to CoreLogic’s Market Conditions Indicators (MCI) data. The MCI categorizes markets as overvalued if their home prices are at least 10% higher than the long-term sustainable level. These overvalued cities include Denver, Salt Lake City, Phoenix, Houston, Miami, Las Vegas and Washington, D.C.
Three of those cities, in fact, are leading the top 10 metro areas tracked by CoreLogic for annual price growth. Denver paced the category at 3.4%, followed by Washington, D.C. (3.3%), Miami (3%) and Las Vegas (3%). Each of the top 10 metros as measured by CoreLogic had year-over-year price growth this past October. The smallest gains were seen in Chicago and San Francisco, where prices increased by 0.8% annually.
Moving forward, CoreLogic expects nationwide home prices to increase by 5.4% from October 2019 to October 2020. Month over month, home-price growth is anticipated to be 0.2% from October to November of this year.
