Home prices grew in September on both year-over-year and month-over-month bases, according to the Home Price Index released by CoreLogic.
Home prices increased nationally by 5.6% year over year from September. On a month-over-month basis, prices increased by 0.4% in September from revised August data.
CoreLogic Chief Economist Frank Nothaft said home price growth has started to slow down given the erosion of affordability in the highest cost markets.
“Hawaii, California, and Massachusetts had median sales prices above $400,000 this summer, the highest in the nation, while annual home price growth slowed steadily between June and September in these three states,” Nothaft said. “When comparing September 2018 with September 2017, annual price appreciation slowed more in these states than in the US overall. Nationally, annual price growth slowed 0.5 percentage points. However, in Hawaii, California, and Massachusetts, growth rates decreased by 1.7, 0.7, and 1.0 percentage points, respectively.”
CoreLogic CEO Frank Martell noted that company research indicates younger millennials want to purchase homes but the majority of them consider affordability a key obstacle. “Less than half of younger millennials who are currently renting feel confident they will qualify for a mortgage, especially in such a competitive environment,” he said.
Looking ahead, the CoreLogic HPI Forecast indicates home prices will increase by 4.7% on a year-over-year basis in September 2019. On a month-over-month basis, home prices are expected to decrease by 0.6% from September to October.