Dive Brief:
- Home prices across the U.S., including distressed sales, rose 1.2% between July and August and 6.9% between August 2014 and August 2015, CoreLogic reported in its Home Price Index Tuesday.
- That 1.2% gain is higher than CoreLogic estimated last month, but it is still lower than the 1.7% price increase between June and July. August's numbers confirm CoreLogic's prediction of a slowdown in national home prices.
- In its report, CoreLogic also predicted that home prices will stay unchanged between August and September and rise 4.3% between August 2015 and August 2016.
Dive Insight:
CoreLogic attributes the slowdown in home prices to higher mortgage rates and a slow, but steady, increase in single-family housing starts — two factors that will likely continue into 2016. With this "dampen[ed] demand," home price growth is expected to moderate, according to Frank Nothaft, CoreLogic chief economist.
The estimates for 2016, however, still include home price increases, but the estimated price hikes year-over-year are smaller than during 2015.
"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," said Anand Nallathambi, president and CEO of CoreLogic.
While many predicted a slowdown in home prices at the end of 2015, CoreLogic's report offers positive data for the housing market, which has been plagued by a lack of affordable inventory and frustrated potential buyers delaying homeownership due to high price tags.
