Americans who pursued free home values in November discovered that home prices continued their gradual ascent, as demand has yet to cool.
Including distressed property sales, average home prices in the United States rose more than 6 percent in November, according to data analytics firm CoreLogic. That estimate is on a year-over-year basis. When compared to October, prices increased by approximately 0.5 percent.
“Home prices have risen for 16 consecutive months.”
Frank Nothaft, CoreLogic chief economist, pointed out how home prices have not only risen consistently for several months, but also grew at an appreciable clip.
“Heading into 2016, home price growth remains in its sweet spot,” Nothaft explained. “Prices have increased between 5 and 6 percent on a year-over-year basis for 16 consecutive months.”
Home prices soften in Texas, California
However, Nothaft hastened to mention, there are some early signs suggestive of weakening. For instance, in the South and West – specifically Texas and California – the free house price estimates there aren’t as high as the national average. Still, price growth alone is proof positive that both regions are healthy.
Anand Nallathambi, CoreLogic president and CEO, indicated that price growth can often be a double-edged sword. On one hand, it’s a positive development for current homeowners because it means their investment is gaining value.
“Strong demand and tight supply in many markets are contributing to the long-sustained boom in prices and home equity,” Nallathambi explained. “[This] is a very good thing for those owning homes.”
At the same time, though, asking prices are rising at a pace that salaries haven’t kept up with, Nallathambi pointed out. Therefore, affordability is more of a concern in several markets.
Mortgage activity strong, but slower in November
This may explain why November was a fairly mild month in terms of mortgage estimates sought out by aspiring homeowners. Over the four-week period, mortgage application activity decreased three times from the previous seven-day stretch. For example, during the week ending Nov. 20, loan volume slipped 3.2 percent from seven days earlier, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.
Not a month goes by when someone isn’t looking to buy a house. However, most mortgage activity in each month is to take advantage of refinance rates. During the same week that concluded Nov. 20, near 59 percent of overall applications were for refinancing, MBA reported, down slightly from the previous seven-day period.