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Rising Home Prices Show No Signs of Stopping

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CoreLogic’s Home Price Index Report (HPI) reveals home prices nationally rose 3.6% annually in August are expected to rise 5.8% over the next year. 

August’s HPI gain was down, though, from August 2018’s gain of 5.5% and was a slight increase of the prior month’s increase of 3.3%. CoreLogic states home prices have been increasing between 3.2% to 3.6% for the past six months, “indicating that the range of home price growth has plateaued.” 

The lowest price housing tier saw home prices rise 5.5% year-over-year in August 2019, compared to 4.5% growth for the low-to middle-price tier and 3.9% for the middle-to moderate-price tier. Prices for higher priced homes rose 3.2%. 

Overall, the HPI has increased annually every month since February 2012 and has gained 61.9% since hitting bottom in March 2011. According to CoreLogic, as of August 2019 the overall HPI was 9% higher than its pre-crisis peak in April 2006. 

Idaho led the nation in appreciation for the eleventh-consecutive month, with annual appreciate of 11.6% in August. Connecticut was the only state with home price depreciation in August, falling 0.5% from last August. 

Home prices in 41 states, including the District of Columbia, are higher than their normal pre-crisis peaks. California, Idaho, and Michigan surpassed their normal pre-crisis peak as of August 2019.

Connecticut’s home prices in August were the farthest below its all-time HPI high—16.3% below the July 2006 peak. 

While home prices continue to rise, First American’s House Price Index reported last month that consumer home-buying power increased 0.5% from the previous month. 

The average household income increased 2.4% since last year and nearly 57% since January 2000.

Mark Fleming, Chief Economist at First American, said fall is the end of homebuying season and affordability saw improvements. 

“The decline in mortgage rates alone increased house-buying power by $23,900 since March 2019. Over the same period, household income grew by 0.4%, boosting consumer house-buying power by $1,600,” Fleming said. 

Overall, Fleming said, consumer house-buying power grew by $25,500 in July compared to March.

About Author: Mike Albanese

A graduate of the University of Alabama, Mike Albanese has worked for news publications since 2011 in Texas and Colorado. He has built a portfolio of more than 1,000 articles, covering city government, police and crime, business, sports, and is experienced in crafting engaging features and enterprise pieces. He spent time as the sports editor for the "Pilot Point Post-Signal," and has covered the DFW Metroplex for several years. He has also assisted with sports coverage and editing duties with the "Dallas Morning News" and "Denton Record-Chronicle" over the past several years.
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