Home prices rose more than 6% annually in December and similar gains are expected throughout this course of this year, according to the latest data from CoreLogic (NYSE: CLGX).
Nationwide, home prices, including distressed sales, increased 6.3% year-over-year in December 2015, and 0.8% on a monthly basis compared to November, according to the most recent CoreLogic Home Price Index (HPI) released this week.
Looking ahead, home prices are projected to increase by 5.4% on a annual basis to December 2016, and 0.2% month-over-month from December to January 2016, as indicated by CoreLogic’s forward-looking HPI Forecast analysis.
“Nationally, home prices have been rising at a 5 to 6 percent annual rate for more than a year,” said CoreLogic Chief Economist Dr. Frank Nothaft in a prepared statement. “However, local-market growth can vary substantially from that.”
Several metropolitan areas have already experienced double-digit home price appreciation in December, such as San Francisco and Denver, which saw prices increase 12.6% and 11.4% year-over-year, respectively. These metro markets, according to CoreLogic’s analysis of market conditions, are currently considered “overvalued.” Looking ahead, the HPI Forecast projects home prices to increase 12.6% in San Francisco and 6.1% year-over-year by December 2016.
Five states and the District of Columbia reached new price appreciation highs in December, including Colorado, Hawaii, Maine, New York and Texas; whereas three states reported negative appreciation during the month: Louisiana (-2.9%), Mississippi (-2.8%) and New Mexico (-0.1%).
Including distressed sales, CoreLogic forecasts national single-family home prices will reach a new peak level in May 2017, just in time for the spring home buying market.
As the spring season approaches, higher property valuations appear to be driving up single-family construction, said CoreLogic President and CEO Anand Nallathambi.
“Additional housing stock, especially in urban centers on the coasts such as San Francisco, could help to temper home price growth in the longer term,” Nallathambi said in a statement. “In the short and medium term, local markets with strong employment growth are likely to experience a continued rise in home sales and price growth well above the U.S. average.”
View the CoreLogic HPI data for December 2015.
Written by Jason Oliva