Home prices appreciated at the rate of 6 percent year-over-year in July 2016 and are expected a continue to rise at only a slightly lesser rate (5.4 percent) by July 2017, according to CoreLogic’s Home Price Index (HPI) for July 2016 released on Tuesday.
Month-over-month, home prices rose by 1.1 percent from June to July and are expected to increase by another 0.4 percent from July to August. The CoreLogic HPI Forecast is attained by using a combination of CoreLogic HPI and other economic variables. The current economic climate—an unemployment rate of 4.9 percent and 232,000 jobs added per month from June to August, combined with mortgage interest rates hovering above record lows, are providing the perfect setup for an increase in home sales, according to CoreLogic.
“If mortgage rates continue to remain relatively low and job growth continues, as most forecasters expect, then home purchases are likely to rise in the coming year,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The increased sales will support further price appreciation, and according to the CoreLogic Home Price Index, home prices are projected to rise about 5 percent over the next year.”
Oregon (11.2 percent), Washington (10.2 percent), and Colorado (9.3 percent) were the top three states in year-over-year home price appreciation in July with the largest metros in those states (Portland, Seattle, and Denver, respectively) all recording double-digit year-over-year price gains.
While markets in the West for the most part experienced healthy home price appreciation in July, markets in the East have been struggling. Connecticut saw home prices fall by 1.2 percent, the only state to post a negative over-the-year price gain in July. Other states such as New Jersey (0.2 percent), Delaware (0.3 percent), and Vermont (0.8 percent), all Eastern states, experienced home price growth of less than 1 percent over-the-year in July.
“The strongest home price gains continue to be in the western region,” said Anand Nallathambi, president and CEO of CoreLogic. “As evidence, the Denver, Portland and Seattle metropolitan areas all recorded double-digit appreciation over the past year.”