U.S. home prices increased 1.2% in August compared with July and increased 6.9% compared with August 2014, according to CoreLogic's home price index (HPI) report. The figures include distressed sales.
Although home prices have been rising steadily, the rate of appreciation has been slowing. Currently, CoreLogic is forecasting that home price appreciation will be flat month over month in September and will increase by 4.3% year over year from August of this year to August 2016.
The firm arrives at its forecast in part by using state-level forecasts and by weighting those indices according to the number of owner-occupied households for each state.
‘Economic forecasts generally project higher mortgage rates and more single-family housing starts for 2016,’ says Frank Nothaft, chief economist for CoreLogic, in a statement. ‘These forces should dampen demand and augment supply, leading to a moderation in home price growth.’
‘Home price appreciation in cities like New York, Los Angeles, Dallas, Atlanta and San Francisco remain very strong, reflecting higher demand and constrained supplies,’ adds Anand Nallathambi, president and CEO of CoreLogic. ‘Continued gains in employment, wage growth and historically low mortgage rates are bolstering home sales and home price gains. In addition, an increasing number of major metropolitan areas are experiencing ever-more severe shortfalls in affordable housing due to supply constraints and higher rental costs. These factors will likely support continued home price appreciation in 2016 and possibly beyond.’
To access the full report, click here.