U.S. home prices increased 0.5% in October and were up 3.5% compared with November 2018, according to CoreLogic’s home price index.
Although that is a much slower rate of growth compared with earlier this year, the firm is forecasting the home price appreciation will accelerate starting in 2020.
“Nationally, over the past year, home prices are up 3.5 percent with the rate of growth accelerating from September into October,” says Frank Martell, president and CEO of CoreLogic, in a statement. “We expect home prices to rise at least another five percent over the next 12 months.”
More specifically, the firm is forecasting annual price growth to increase by 5.4% from October 2019 to October 2020.
Frank Nothaft, chief economist at CoreLogic, points out that home price growth can vary wildly from local market to local market.
“While we saw prices up 3.5% nationally last year, home prices also declined in 22 metropolitan areas,” Nothaft says. “Price softness occurred in some high-cost urban areas and in metros with weak employment growth during the past year.”
Using income and other data in the top cities, CoreLogic estimates that 35% of top 100 metropolitan areas had an “overvalued” housing market as of the end of October.
Roughly 27% were “undervalued” and 38% were “at value.”