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Home Prices Rising, Especially on the Lower End

prices-upHome prices nationally are still on the incline, most notably in more affordable homes, according to the latest Home Price Index from CoreLogic.

The company’s latest report, released Monday, shows that nationally home prices rose more than 6 percent this year, through September. But this national average obscures notable trends in the rising prices of houses on opposite ends of the median-price scale.

According to the report, properties valued at 25 percent or more higher than the median price in a given market have seen prices rise by a little less than 4 percent so far this year. But properties valued 25 percent or more below the median have seen their values increase by more than 9 percent this year.

Frank Nothaft, CoreLogic’s chief economist, said that this trend takes a familiar path. “This pattern occurs not just during the past year but also when we compare the price appreciation relative to the trough in home prices after the Great Recession,” he wrote.

nothaft_nov_fig1_largeOne reason for the difference between the two price tiers, Nothaft said, rests on “the difference in the supply of homes coming on the market for sale within each segment.” Part of that supply comes from new construction.

“And while single-family construction remains at a relatively low pace,” he wrote, “the homes that are being built tend to be larger, have more amenities, and add new supply in the higher-priced segments of a local market.”

Another reason the lower-tier is seeing faster-climbing values is strong interest from investors supplementing the owner-occupant bid. “Investors have generally acquired moderately priced homes rather than million-dollar homes, thereby adding to demand for the lower-priced segment,” Nothaft wrote.

Nothaft said that the coming year will likely see price appreciation moderate nationally across all price tiers, but that he does expect to keep seeing appreciation rise more slowly in higher-priced homes.

“Overall, we expect the CoreLogic national Home Price Index to appreciate 5 percent during 2016,” he wrote.

About Author: Scott_Morgan

Scott Morgan is a multi-award-winning journalist and editor based out of Texas. During his 11 years as a newspaper journalist, he wrote more than 4,000 published pieces. He's been recognized for his work since 2001, and his creative writing continues to win acclaim from readers and fellow writers alike. He is also a creative writing teacher and the author of several books, from short fiction to written works about writing.
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