In February, home prices rose 4 percent year-over-year, with an 0.7 percent change from January, according to CoreLogic’s latest Home Price Index (HPI™) report. Additionally, the average home price is projected to rise 4.7 percent this year.
“During the first two months of the year, home-price growth continued to decelerate,” says Dr. Frank Nothaft, chief economist for CoreLogic. “This is the opposite of what we saw the last two years when price growth accelerated early. With the Federal Reserve’s announcement to keep short-term interest rates where they are for the rest of the year, we expect mortgage rates to remain low and be a boost for the spring buying season. A strong buying season could lead to a pick-up in home-price growth later this year.”
Thirty-five percent of the 100 largest markets are overvalued, a condition CoreLogic defines as when “home prices are at least 10 percent higher than the long-term, sustainable” trend, according to the report; 38 percent were at value; and 27 percent were undervalued (“at least 10 percent below the long-term, sustainable” trend).
“About 40 percent of the top 50 largest metropolitan areas in the country are now categorized as overvalued, and we expect that percentage to grow over the remainder of 2019,” says Frank Martell, president and CEO of CoreLogic. “The cost of either buying or renting in expensive markets puts a significant strain on most consumers. Our research tells us that about 74 percent of millennials, the single largest cohort of homebuyers, now report having to cut back on other categories of spending to afford their housing costs.”
For more information, please visit www.corelogic.com.
