CoreLogic: Home Prices Up 6% for 6th Straight Month
CoreLogic, Irvine, Calif., said U.S. home prices rose by more than 6 percent annually for the sixth consecutive month, led by Western markets.
The company’s monthly Home Price Index cautioned, however, that many of the top housing markets are “overvalued” as tight inventories and rising interest rates reduce affordability.
The report said home prices nationally increased year over year by 6.6 percent through January; on a monthly basis, CoreLogic said home prices rose by 0.5 percent between December and January.
“Entry-level homes have been in particularly short supply, leading to more rapid home-price growth compared with more expensive homes,” said Frank Nothaft, chief economist for CoreLogic. “Homes with a purchase price less than 75 percent of the local area median had price growth of 9.0 percent during the year ending January 2018. Homes that sold for more than 125 percent of median appreciated 5.3 percent over the same 12-month period. Thus, first-time buyers are facing acute affordability challenges in some high-cost areas.”
According to the CoreLogic Market Condition Indicators data, an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock, 34 percent of metropolitan areas have an “overvalued” housing market as of January. Twenty-seven percent were “undervalued” and 39 percent were at value. When looking at only the top 50 markets based on housing stock, 48 percent were overvalued, 14 percent were undervalued and 38 percent were at value.
Looking ahead, the CoreLogic HPI Forecast suggests the national home-price index is projected to increase by 4.8 percent on a year-over-year basis through January 2019, with a 12-month increase of more than 7 percent projected for California, Florida, Nevada and Oregon.
“A rise in mortgage rates coupled with home-price growth further erodes affordability,” said Frank Martell, president and CEO of CoreLogic. “Millennials who are looking to become first-time homeowners find it particularly challenging to find an affordable home in these areas.”
