CoreLogic: March Home Price Appreciation Slows to Under 4%

May 7, 2019

CoreLogic, Irvine, Calif., said March annual home price appreciation slowed to just 3.7 percent, although it noted price appreciation could tick up to nearly 5 percent by year-end.

The company’s monthly Home Price Index also reported a month-over-month increase of 1 percent in March.

CoreLogic Deputy Chief Economist Ralph McLaughlin said while home-price growth is still trending upward, it’s doing so at a slower pace than a year ago.

“The U.S. housing market continues to cool, primarily due to some of our priciest markets moving into frigid waters,” McLaughlin said. “But the broader market looks more temperate as supply and demand come into balance. With mortgage rates flat and inventory picking up, we expect more buyers to take advantage of easing housing market headwinds.”

The CoreLogic Market Condition Indicators, an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock, reported 35% of metropolitan areas have an overvalued housing market as of March. It said 26% of the top 100 metropolitan areas were undervalued and 39% were at value. When looking at only the top 50 markets based on housing stock, 40% were overvalued, 16% were undervalued and 44% were at value.

CoreLogic said looking ahead, after some initial moderation in early 2019, the CoreLogic HPI Forecast indicates home prices will begin to pick up and increase by 4.8% on a year-over-year basis through March 2020. On a month-over-month basis, home prices are expected to decrease by 0.3% from March to April.

During the first quarter, CoreLogic and RTi Research, Norwalk, Conn., conducted an extensive survey measuring consumer-housing sentiment in high-priced markets. Survey respondents indicated high home prices have an impact on high rental prices as well. Nearly 76% of renters and buyers in high-priced markets agreed housing prices in these markets appeared to be driving rental rates up.

“The cost of either buying or renting in expensive markets puts a significant strain on most consumers,” said Frank Martell, president and CEO of CoreLogic. “Nearly half of survey respondents–44% of renters–cited the cost to rent in high-priced housing markets as the number one barrier to entry into homeownership. This is potentially forcing renters to wait longer to have the necessary down payment in these communities.”