10 States Where Home Prices Are Hitting New Record Highs

Source: iStock

Source: iStock

The last thing our economy needs is another housing bubble when dust from the last financial demolition has yet to clear. More than four million homeowners are still underwater on their mortgages. Nine million borrowers have less than 20% equity. Mortgage rates are historically low, but so is housing supply. If we’ve learned anything from the previous burst it’s that not all markets are created equal. Pockets of strength and weakness are found across the nation.

National home prices rose 6.8% in October on a year-over-year basis, according to the latest report from CoreLogic. That marks the 44th consecutive month of gains. Though this uptrend may bring back memories of yesteryear’s housing bubble, the results vary significantly by state. Colorado and Washington home prices jumped the most at 10.5% and 9.6%, respectively, while Louisiana (-0.2%) and Mississippi (-1.7%) posted a decline.

“Many markets experienced a low inventory of homes offered for sale and strong buyer demand, sustaining upward pressure on home prices,” explained Dr. Frank Nothaft, chief economist for CoreLogic. “These conditions are likely to persist as we enter 2016. During the year ending October 2016, we expect the CoreLogic national Home Price Index appreciation to slow to 5.2 percent.”

Currently, home prices nationwide are only 6.8% below their bubble peak set in April 2006. However, 10 states (including Washington, D.C.) already reached new highs in October. Let’s take a look at the 10 states making new highs, in order of year-over-year price appreciation.

Source: CoreLogic

Source: CoreLogic

1. Colorado

  • 12-month change: 10.5%
  • Forecasted year-over-year change: 5.9%

2. New York

  • 12-month change: 8.6%
  • Forecasted year-over-year change: 4.2%

3. Texas

  • 12-month change: 7%
  • Forecasted year-over-year change: 2.4%

4. Hawaii

  • 12-month change: 6.2%
  • Forecasted year-over-year change: 5.7%

5. Tennessee

  • 12-month change: 5.5%
  • Forecasted year-over-year change: 2.6%

6. Nebraska

  • 12-month change: 5.4%
  • Forecasted year-over-year change: 3.8%

7. Washington, D.C.

  • 12-month change: 4.4%
  • Forecasted year-over-year change: 5.7%

8. Wyoming

  • 12-month change: 4.3%
  • Forecasted year-over-year change: 4.1%

9. Oklahoma

  • 12-month change: 3.4%
  • Forecasted year-over-year change: 4.9%

10. Maine

  • 12-month change: 1.9%
  • Forecasted year-over-year change: 5.3%

On the positive, most housing markets in the United States are not overvalued, defined by CoreLogic as having a current Home Price Index of 10% above the long-term fundamental value for that market. In fact, of the 46 overvalued markets in October, 16 of them were located in Texas. As the map above shows, Arizona also has a large portion of red.

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