U.S. home prices increased 0.4% in September compared with August and were up 5.6% compared with September 2017, according to CoreLogic’s home price index.
Currently, the software, data and analytics firm is forecasting that home prices will increase by 0.6% in October compared with September and will rise by 4.7% over the next 12 months.
Home price appreciation has been slowing for the past several months and the trend is expected to continue into 2019.
“The erosion of affordability in the highest cost markets has begun to slow home price growth,” explains Frank Nothaft, chief economist for CoreLogic, in a statement. “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.
“When comparing September 2018 with September 2017, annual price appreciation slowed more in these states than in the U.S overall,” Nothaft adds. “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 says 38% of the top 100 largest cities in the U.S. had an “overvalued” housing market (one in which home prices are at least 10% above the long-term, sustainable level) as of September – unchanged compared with the August report. About 19% of the top 100 metropolitan areas were “undervalued,” and 43% were “at value.”