CoreLogic: Home Price Appreciation Continues Torrid Pace

CoreLogic, Irvine, Calif., said U.S. home prices continued to appreciate strongly in July, rising by nearly 1 percent from June and by nearly 7 percent from a year ago.

The company’s monthly U.S. Home Price Index said home prices nationally increased year over year by 6.7 percent and by 0.9 percent month over month. As per recent trends, home prices in the Pacific Northwest far outpaced other regions, led by Washington with nearly 13 percent year over year growth.

“Home prices in July continued to rise at a solid pace with no signs of slowing down,” said Frank Martell, president and CEO of CoreLogic. “The combination of steadily rising purchase demand along with very tight inventory of unsold homes should keep upward pressure on home prices for the remainder of this year. While mortgage interest rates remain low, affordability cracks are emerging as over a third of U.S. top cities are now overvalued.”

Washington (12.9 percent) led all states in annual growth, followed by Utah (10.8 percent), Idaho (9.0 percent), Oregon (8.3 percent), Colorado (8.3 percent) and Nevada (8.0 percent). Only West Virginia (-2.2 percent) saw negative yearly growth.

Among major metros, Denver saw sharpest growth (8.3 percent), followed by Las Vegas (7.7 percent), San Francisco (7.1 percent), Los Angeles (6.9 percent) and Boston (6.5 percent).

“In July, home price growth in the Pacific Northwest and mountain states led the nation with the highest appreciation rates,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The sharp increase in prices in Washington and Utah has been especially striking, with home price growth in both states accelerating by 3 percentage points since the beginning of this year.”

CoreLogic said of the 100 largest metropolitan areas, 34 percent of cities have an “overvalued” housing stock as of July. Twenty-eight percent of the top 100 cities were “undervalued” and 38 percent were “at value.” When looking at only the top 50 markets, based on housing stock, 46 percent were overvalued, 16 percent were undervalued and 8 percent were at value.

Looking ahead, the CoreLogic HPI Forecast suggests home prices could increase by 5 percent year over year and by 0.4 percent month over month.