CoreLogic: August Home Prices Up 3.6%

CoreLogic, Irvine, Calif., said home prices rose by 3.6% annually in August, still somewhat slower than the hotter pace from a year ago.

The company’s monthly Home Price Index noted on a month-over-month basis, prices increased by 0.4%.

“The 3.6% increase in annual home price growth this August marked a big slowdown from a year earlier when the U.S. index was up 5.5%,” said Frank Nothaft, chief economist with CoreLogic. “While the slowdown in appreciation occurred across the country at all price points, it was most pronounced at the lower end of the market. Prices for the lowest-priced homes increased by 5.5%, compared with August 2018, when prices increased by 8.4%. This moderation in home-price growth should be welcome news to entry-level buyers.”

According to the CoreLogic Market Condition Indicators an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock, 37% of metropolitan areas have an overvalued housing market as of August. Twenty-three percent of the top 100 metropolitan areas were undervalued, and 40% 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.

The CoreLogic HPI Forecast suggested annual price growth to increase by 5.8% by August 2020. On a month-over-month basis, the forecast calls for home prices to increase by 0.3% through September.

During the second quarter, CoreLogic, together with RTi Research, Norwalk, Conn., conducted a survey measuring consumer-housing sentiment among millennials. The survey found 75% of millennial renters indicate they will likely purchase a home in the future. However, despite a desire from the entire millennial cohort to purchase a home, there is a clear difference between older and younger millennials’ living situation preferences. Generally, older millennials (30-38) aspire to own a single, stand-alone home in the suburbs that is somewhat secluded. Meanwhile, younger millennials (21-29) lean towards modern apartment rentals in urban settings, with 55% of younger millennials saying they prefer to also live in lively neighborhoods. Still, 79% of younger millennials are confident that they will be homeowners in the future.

“The millennial cohort has now entered the housing market in force and is already driving major changes in buying and selling patterns,” said Frank Martell, president and CEO of CoreLogic. “Almost half of the millennials over 30 years old have bought a house in the last three years. These folks are increasingly looking to move out of urban centers in favor of the suburbs, which offers more privacy and a greener environment. Perhaps most significantly, almost 80% of all millennials are confident they will become homeowners in the future.”