Dive Brief:
- U.S. home prices, including distressed sales, rose 0.6% between August and September and 6.4% between September 2014 and September 2015, CoreLogic reported in its Home Price Index Tuesday.
- That small gain was significantly lower than the 1.2% rise between July and August and the 1.7% increase during the previous month.
- CoreLogic expects the home price slowdown to continue, as it predicts prices will slightly fall between September and October. In the report, CoreLogic estimated home prices will rise 4.7% between September 2015 and September 2016.
Dive Insight:
Residential industry experts have largely welcomed a slowdown in prices, as sky-high costs have kept first-time buyers from jumping into homeownership.
"Home price volatility is now back to the long-term trend prior to the boom and bust which is a good barometer of the market’s stability and health," Sam Khater, deputy chief economist for CoreLogic, said in a release.
However, CoreLogic cautioned that the current pattern of home price growth has led to more markets becoming "overvalued" — when their home prices are more than 10% higher than the long-term sustainable level — which could endanger the sustained growth in the residential industry.
"More has to be done to expand inventories if we are going to address the emerging affordability crisis, especially in hot markets like California and Colorado," Khater said.
