On an annual basis in October, home prices rose 3.5 percent, according to CoreLogic’s latest Home Price Index (HPI™) report. By October 2020, CoreLogic expects home prices to rise 5.4 percent.
“Nationally, over the past year, home prices are up 3.5 percent with the rate of growth accelerating from September into October,” Frank Martell, president and CEO of CoreLogic, says. “We expect home prices to rise at least another 5 percent over the next 12 months.”
Despite the uptick, the majority of millennials (75 percent) are confident in their ability to get a mortgage, according to an additional CoreLogic study, conducted in conjunction with RTi Research.
“Interestingly, this persistent increase in home prices isn’t deterring older millennials,” Martell says. “In fact, 25 percent of those surveyed anticipate purchasing a home over the next six to eight months.”
Thirty-five percent of the 100 largest markets are overvalued, a condition CoreLogic defines as when “home prices are at least 10 percent higher than the long-term, sustainable” trend, according to the HPI report; 38 percent are at-value; and 27 percent are undervalued (“at least 10 percent below the long-term, sustainable” trend). Across the 50 largest markets, 40 percent are overvalued; 40 percent are at-value and 20 percent are undervalued.
“Local home-price growth can deviate widely from the change in our U.S. index,” Dr. Frank Nothaft, chief economist at CoreLogic, says. “While we saw prices up 3.5 percent nationally last year, home prices also declined in 22 metropolitan areas. Price softness occurred in some high-cost urban areas and in metros with weak employment growth during the past year.”