CoreLogic: January Home Prices Up 4% Year Over Year
CoreLogic, Irvine, Calif., said January home prices rose both year over year and month over month. Home prices increased nationally by 4% from a year ago; on a month-over-month basis, prices increased by 0.1%.
The company’s monthly Home Price Index and HPI Forecast said home price growth accelerated for the third consecutive month.
“In February, mortgage rates fell to the lowest level in more than three years, which likely will spur additional home shopping activity and price appreciation,” said CoreLogic Chief Economist Frank Nothaft. “Low mortgage rates and rising income supported home sales.”
According to the CoreLogic Market Condition Indicators, an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock, 33% of metropolitan areas have an overvalued housing market as of January. Twenty-nine percent of the top 100 metropolitan areas were undervalued, and 38% were at value. When looking at only the top 50 markets based on housing stock, 38% were overvalued, 24% were undervalued and 38% were at value in January.
Looking ahead, home prices continue to increase on an annual basis with the CoreLogic HPI Forecast indicating annual price growth at 5.4% thorough January 2021. On a month-over-month basis, the forecast calls for U.S. home prices to increase by 0.2% from January to February.
CoreLogic, with RTi Research of Norwalk, Conn., conducted a survey last year measuring consumer-housing sentiment among millennials. While nearly half (44%) of millennials view homebuying as unaffordable, they are generally more optimistic than older generations about housing affordability. However, older generations are less concerned with home prices impacting personal finances and feel more comfortable handling monthly payments than millennials.
“Despite a slowdown in home price growth last summer, annual appreciation is beginning to stabilize,” said Frank Martell, president and CEO of CoreLogic. “While just under half of millennials feel confident they can afford to purchase a home, housing starts have shot up, and mortgage rates have come down, which has helped improve affordability and spur overall housing demand.”