CoreLogic: Home Price Growth Continues to Slow

CoreLogic, Irvine, Calif., said year over year home price growth continued to slow in Septmber amid affordability issues in many key markets.

The company’s monthly Home Price Index reported September home prices increased by 5.6 percent from a year ago, well off the 7.1 percent pace earlier this year. Nevada and Idaho were the only states to post double-digit annual price growth in September.

On a month-over-month basis, CoreLogic said prices increased by 0.4 percent in September from August.

According to the CoreLogic Market Condition Indicators, an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock, 38 percent of metropolitan areas have an overvalued housing market as of September. Nineteen percent of the top 100 metropolitan areas were undervalued and 43 percent were at value. When looking at only the top 50 markets based on housing stock, 46 percent were overvalued, 14 percent were undervalued and 40 percent were at value.

“The erosion of affordability in the highest-cost markets has begun to slow home price growth,” said Frank Nothaft, chief economist for CoreLogic. “Hawaii, California and Massachusetts had median sales prices above $400,000 this summer, the highest in the nation, while annual home price growth slowed steadily between June and September in these three states.”

Looking ahead, the CoreLogic HPI Forecast indicates home prices will increase by 4.7 percent on a year-over-year basis through September 2019. On a month-over-month basis, home prices are expected to decrease by 0.6 percent from September to October.

In 2018, CoreLogic together with RTi Research of Norwalk, Conn., conducted an extensive consumer housing sentiment study, combining consumer and property insights. The study assessed attitudes toward homeownership and the drivers of the home buying or renting decision process. When asked about the desire to own a home, potential buyers in the younger millennial demographic have the desire to buy, 40 percent are extremely or very interested in homeownership; 64 percent say they regularly monitor home values in their local market. However, while, 80 percent of younger millennials plan to move in the next four or five years, 73 percent cite affordability as a barrier to homeownership, far higher than any other age cohort.

“Younger millennials want to purchase homes but the majority of them consider affordability a key obstacle,” said Frank Martell, president and CEO of CoreLogic. “Less than half of younger millennials who are currently renting feel confident they will qualify for a mortgage, especially in such a competitive environment.”