CoreLogic: March Home Prices Up 7 Percent from Year Ago

CoreLogic, Irvine, Calif., said home prices continued to accelerate in March and estimated more than half of the nation’s top 50 markets as “overvalued.”

The company’s monthly Home Price Index reported home prices rose both year over year and month over month. Home prices increased nationally by 7 percent from a year ago, while prices increased by 1.4 percent from February.

The report said all 50 states gained value from a year ago, with Nevada now matching Washington at 12.6 percent annual growth rate.

“Home prices grew briskly in the first quarter,” said CoreLogic Chief Economist Frank Nothaft. “High demand and limited supply have pushed home prices above where they were in early 2006. New construction still lags historically normal levels, keeping upward pressure on prices.”

According to CoreLogic Market Condition Indicators data, 37 percent of metropolitan areas have an overvalued housing market as of March. The MCI analysis categorizes home prices in individual markets as undervalued, at value or overvalued, by comparing home prices to their long-run, sustainable levels, which are supported by local market fundamentals (such as disposable income). Additionally, as of March, 28 percent of the top 100 metropolitan areas were undervalued and 35 percent were at value. When looking at only the top 50 markets based on housing stock, 50 percent were overvalued, 14 percent were undervalued and 36 percent were at value. The MCI analysis defines an overvalued housing market as one in which home prices are at least 10 percent higher than the long-term, sustainable level, while an undervalued housing market is one in which home prices are at least 10 percent below the sustainable level.

Looking ahead, the CoreLogic HPI Forecast suggests the national home-price index could increase by 5.2 percent on a year-over-year basis through March 2019 and by 0.1 percent through April.

“Affordability continues to slip away from the average buyer. Lower-priced homes are appreciating much faster than higher-priced properties, making the affordability crisis even worse,” said CoreLogic President and CEO Frank Martell.