CoreLogic: Home Price Acceleration Continues

Home prices, reacting to continued tight inventories, shot up in November, said CoreLogic, Irvine, Calif.

The company’s monthly Home Price Index said November U.S. home prices increased by 7.1 percent from a year ago and rose by 1.1 percent from October. The Index remains 4 percent below its April 2006 peak but is expected to surpass that peak by the end of 2017.

Home prices continue to march higher, with home prices in 27 states above their pre-crisis peak levels. The Pacific Northwest saw the sharpest annual price increases, led by Oregon (10.3 percent) and Washington (10.0 percent). Colorado (8.8 percent) and Idaho (8.2 percent) also saw near double-digit annual increases. At the other end, Connecticut (-0.5 percent) continued to suffer, while Delaware (0.3 percent) and Wyoming and Alaska (0.9 percent each) saw tepid growth.

“Last summer’s very low mortgage rates sparked demand, and with for-sale inventories low, the result has been a pickup in home-price growth,” said Frank Nothaft, chief economist for CoreLogic.

Nothaft said higher mortgage rates now and in the future should have a slowing effect on home prices. The CoreLogic HPI Forecast projects home prices to increase by 4.7 percent on a year-over-year basis through November 2017; on a month-over-month basis home prices are expected to increase by 0.1 percent through December.