CoreLogic: July Home Prices Up 6.2 Percent As Sellers Stay on Sidelines
Despite predictions that the housing market could soon shift in advantage from sellers to buyers, , homeowners are staying on the sidelines for the time being, believing waiting can result in higher returns, said CoreLogic, Irvine, Calif.
The company’s monthly Home Price Index showed home prices rose in July both year over year and month over month. Home prices increased nationally by 6.2 percent a year ago; on a month-over-month basis, prices increased by 0.3 percent in July from June.
According to the CoreLogic Market Condition Indicators, an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock, 40 percent of metropolitan areas have an “overvalued” housing market as of July. Twenty percent of the top 100 metropolitan areas were “undervalued” and 40 percent were “at value.” When looking at only the top 50 markets based on housing stock, 50 percent were overvalued, 12 percent were undervalued and 38 percent were at value.
CoreLogic Chief Economist Frank Nothaft said with increased interest rates and home prices, the Index is rising at a slower rate than it was a year ago. “While markets in the western part of the country continue to experience rapid home-price growth, many of those metros are overvalued, and will likely experience a slowdown soon,” he said.
Looking ahead, the CoreLogic HPI Forecast indicates the national home-price index is projected to continue to increase by 5.1 percent on a year-over-year basis through July 2019 and to decrease by 0.2 percent from July to August.
An earlier CoreLogic/RTI housing sentiment study found 50 percent of the top 50 markets are considered overvalued; however, residents in many of these high-price growth markets have expectations that might be at odds with this reality, with 62 percent of residents in these markets expect their homes will be worth more in three years than they are today. Meanwhile, 55 percent of residents in no/negative growth markets believe their homes will be worth either the same or less in three years than they are today. Additionally, 47 percent of residents in high-price growth markets and 31 percent in lower growth markets feel they are in a “sellers’ market.”
“Many consumers see their homes as good investments,” said CoreLogic President and CEO Frank Martell. “Our consumer research indicates homeowners, especially those in high-price growth markets, are confident that by waiting to sell, they will receive a greater return on investment than they would today. In other words, sellers are largely staying put. With fewer homes on the market, price pressure will continue to rise.”
