US Home Prices Accelerated in October

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US home prices rose at a faster year-over-year pace in October than in September, snapping a seven-month slowdown.

Real estate data provider CoreLogic said on Tuesday that prices increased 6.1 per cent in October compared with 12 months earlier.

That was up from September’s year-over-year increase of 5.6 per cent.

Still, home values are rising more slowly than they were earlier this year, when 12-month gains were averaging nearly double their current pace.

The price momentum began to tail off in the middle of the year as home values in more cities and states neared the record highs last seen shortly before the Great Recession began in late 2007.

Higher prices have reduced affordability, especially because the incomes of many would-be buyers have yet to match their pre-recession levels.

Lending standards also remain comparably tight.

Previous price increases led investors to pull back from the home market, and first-time buyers have yet to fill the void created by their departure.

Price growth will likely remain mild as a result, CoreLogic said.

The firm projects that home values will rise 5.1 per cent over the next 12 months.

Roughly half the country’s homes will match or surpass their pre-recession prices by mid-2015, it predicts.

Every state reported a price gain in October, and CoreLogic said prices reached new highs in Colorado, Louisiana, Nebraska, New York, North Dakota, South Dakota, Tennessee, Texas and Wyoming.

In 27 states, home values are within 10 per cent of their previous peaks.


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