CoreLogic: Home Price Appreciation Picking Up

CoreLogic, Irvine, Calif., released its Home Price Index and HPI Forecast for July, which showing home prices rose both year over year and month over month.

The report said home prices increased nationally by 3.6% from a year ago. On a month-over-month basis, prices increased by 0.5%. CoreLogic said home prices continue to increase on an annual basis, forecasting annual price growth to increase by 5.4% by July 2020. On a month-over-month basis, the forecast calls for home prices to increase by 0.4%.

“Sales of new and existing homes this July were up from a year ago, supported by low mortgage rates and rising family income,” said CoreLogic Chief Economist Frank Nothaft, “With the for-sale inventory remaining low in many markets, the pick-up in buying has nudged price growth up. If low interest rates and rising income continue, then we expect home-price growth will strengthen over the coming year.”

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 July. Twenty-three percent of the top 100 metropolitan areas were undervalued, while 40% were at value. When looking at only the top 50 markets, 40% were overvalued, 16% were undervalued and 44% were at value.

During the second quarter, CoreLogic and RTi Research Norwalk, Conn., conducted a survey measuring consumer-housing sentiment among millennials. The survey found that 26% of this age cohort expressed an interest in buying a home in the next 12 months, but only 8% indicated a desire to sell their home within the same time frame. CoreLogic President and CEO Frank Martel said this means new housing starts, or sellers from other age cohorts, will need to make up the necessary available housing stock to meet the demand, adding this desire to buy while housing stock is limited will continue to force prices up as buyers search for a home to purchase.

“A growing number of millennials are expressing an interest in buying homes, reinforcing the theory that this cohort is continuing to engage within the housing market,” Martell said. “But, with so few homes available for sale, the imbalance has created an affordability crisis that is getting worse every day. Demand exceeds supply and we’re unsure of when the two will balance out.”