Houses price rises in America are set for a slowdown, according to property experts.
Although home values have increased by 7% in the past 12 months, the rate of increase is expected to slow over the coming year.
Property firm CoreLogic predicts that values will go up by 4.2% by October 2018 – almost half the current rate of increase.
They say the slowdown will start next month as house prices fall in value.
In October, they rose by 0.9%, but the forecast for the following month is a fall of 0.2%.
“Single-family residential sales and prices continued to heat up in October,” said the firm’s chief economist Frank Nothaft.
Price rise winners and losers
“On a year-over-year basis home prices grew more than 6% for four consecutive months until October, the longest such streak of prices rises since June 2014.
“This escalation in home prices reflects both the acute lack of supply and the strengthening of the economy.”
Although rising home prices are good for homeowners and the US economy as people have more wealth locked in their home that gives them a cushion against risk and the ability to spend more, the firm points out not everyone is a winner.
Three states returned house price growth of more than 9% – Washington (12.5%), Nevada and Utah (both 10.1%).
Eight states had price increases of less than 3% – Alaska, Wyoming, New Mexico, Oklahoma, West Virginia, Virginia, New Jersey and Connecticut.
Tough market for first time buyers and renters
Las Vegas, Nevada, was the metropolitan area seeing the largest home price rise of 10.2% over the year.
Denver, Colorado, was second highest, with an 8.3% increase, and San Diego, California, was third with an 8% rise. The Californian cities of San Francisco (7.9%) and Los Angeles (7%) made up the rest of the top five.
Boston, Massachusetts, led the way for the East Coast posting a 7% rise.
The remaining top 10 cities were Miami, Florida, (5%), Washington DC (4.6%), Chicago, Illinois (3.8%) and Houston, Texas (3.1%).
“Entry-level renters and first-time buyers have affordability challenges,” said CoreLogic CEO Frank Martell.
“Rents paid by entry-level renters for single family homes rose by 4.2% over the past 12 months compared with overall rent growth of 2.7% over the same time.”