Dive Brief:
- U.S. home prices, including distressed sales, rose 1.0% between September and October and 6.8% between October 2014 and October 2015, CoreLogic reported in its Home Price Index Tuesday.
- In the report, CoreLogic also predicted home prices will rise a slight 0.1% between October 2015 and November 2015, and 5.2% between October 2015 and October 2016.
- The gains came as a surprise, as CoreLogic — in its September report — had predicted prices would slightly fall in October.
Dive Insight:
Frank Nothaft, CoreLogic's chief economist, cited limited available inventory and strong demand from buyers as the main factors contributing to rising prices, and he said those trends are expected to continue into 2016.
October's increase comes after a 0.6% rise between August and September. Residential industry experts have largely welcomed the recent slowdown in prices, as sky-high costs have kept first-time buyers from jumping into homeownership.
However, overall, Anand Nallathambi, president and CEO of CoreLogic, said, "The rise in home prices over the past few years has largely been a healthy trend. The shadow inventory has been reduced significantly and home equity levels are now approaching pre-recession levels."
Nallathambi cautioned that in the coming months, price increases "will need to be better correlated to family income trends over time to avoid homes becoming unaffordable for many."
Rising home prices and affordability concerns were the main focus of Zillow's 2016 housing market report, released this week. Zillow predicted the housing market will be defined by "deteriorating housing affordability" in 2016.
