CoreLogic: Home Price Growth Slows; Headwinds on Horizon

CoreLogic, Irvine, Calif., said home price appreciation slowed for the eighth consecutive month in November as more homeowners perceive 2019 as a buyers’ market.

The company’s monthly Home Price Index said November home prices slowed to 5.1 percent annual growth year over year; on a month over month basis, prices increased by 0.4 percent. North Dakota was the only state to show a year-over-year decline in prices in November, while Idaho and Nevada showed double-digit growth.

According to the CoreLogic Market Condition Indicators, an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock, 35 percent of metropolitan areas have an overvalued housing market as of November 2018. Twenty-seven percent of the top 100 metropolitan areas were undervalued, and 38 percent were at value. When looking at only the top 50 markets based on housing stock, 44 percent were overvalued, 18 percent were undervalued and 38 percent were at value.

“The rise in mortgage rates has dampened buyer demand and slowed home-price growth,” said CoreLogic Chief Economist Frank Nothaft. “Interest rates for new 30-year fixed-rate loans averaged 4.9 percent during November, the highest monthly average since February 2011. These higher rates and home prices have reduced buyer affordability. Home sellers are responding by lowering their asking price.”

Looking ahead, the CoreLogic HPI Forecast indicates home prices to increase by 4.8 percent on a year-over-year basis through November 2019. On a month-over-month basis, home prices are expected to decrease by 0.8 percent from November to December.

In 2018, CoreLogic and RTi Research, Norwalk, Conn., conducted a survey measuring consumer-housing sentiment, combining consumer and property insights. When homeowners were asked why they felt their home was increasing in value, they cited desirable location and improving local and national economies. As the country enters a new year, said CoreLogic President and CEO Frank Martell, the state of these economic conditions will continue to impact attitudes toward homeownership and perceived property values.

“A strong economy helps homeowners feel confident about the value of their property,” Martell said. “If recent declines in the stock market shakes consumer confidence in the national economy, we may see homeowners’ perception of home value change and a subsequent buyers’ market emerge in 2019.”