CoreLogic: Home Price Growth Slows to 4.4% Annual Rate

CoreLogic, Irvine, Calif, said annual home price appreciation in January slowed to its lowest rate since 2012.

The company’s monthly Home Price Index reported January home prices increased by just 4.4 percent year over year and by just 0.1 percent from December. Since peaking at 6.6 percent last April, annual home price gains have declined or held steady each month since.

“The spike in mortgage interest rates last fall chilled buyer activity and led to a slowdown in home sales and price growth,” said CoreLogic Chief Economist Frank Nothaft. “Fixed-rate mortgage rates have dropped 0.6 percentage points since November 2018 and today are lower than they were a year ago. With interest rates at this level, we expect a solid home-buying season this spring.”

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 January. 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, 40 percent were overvalued, 18 percent were undervalued and 42 percent were at value in January 2019.

Looking ahead, the CoreLogic HPI Forecast suggests 2019 annual average home price to increase 3.4 percent above the 2018 annual average. On a month-over-month basis, home prices are expected to decrease by 0.9 percent through February.

“The slowing growth in home prices was inevitable in many respects as buyers pull back in the face of higher borrowing and ownership costs,” said CoreLogic President and CEO Frank Martell. “As we head into 2019, we can expect continued strong employment growth and rising incomes which could support a reacceleration in home-price appreciation later this year.”