Report: Home prices up 6.9% in August
IRVINE, Calif., — CoreLogic, a global property information, analytics and data-enabled solutions provider, has released its CoreLogic Home Price Index (HPI) and HPI Forecast for August 2017, which shows home prices are up strongly both year over year and month over month. Home prices nationally increased year over year by 6.9% from August 2016 to August 2017, and on a month-over-month basis, home prices increased by 0.9% in August 2017 compared with July 2017, according to the CoreLogic HPI.
Looking ahead, the CoreLogic HPI Forecast indicates that home prices will increase by 4.7% on a year-over-year basis from August 2017 to August 2018, and on a month-over-month basis home prices are expected to increase by 0.1% from August 2017 to September 2017. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.
“While growth in home sales has stalled due to a lack of inventory during the last few months, the tight inventory has actually helped stabilize price growth,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Over the last three years, price growth in the CoreLogic national index has been between 5% and 7% per year, and CoreLogic expects home prices to increase about 5% by this time next year.”
In an analysis of the country’s 100 largest metropolitan areas based on housing stock, 34% of cities have an overvalued housing stock as of August 2017, according to CoreLogic Market Conditions Indicators (MCI) data. The MCI analysis categorizes home prices in individual markets as undervalued, at value or overvalued by comparing home prices to their long-run, sustainable levels, which are supported by local market fundamentals such as disposable income. Also as of August, 27% 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, 46% were overvalued, 16% were undervalued and 38% were at value. The MCI analysis defines an overvalued housing market as one in which home prices are at least 10% higher than the long-term, sustainable level, while an undervalued housing market is one in which home prices are at least 10% below the sustainable level.
“Nearly half of the nation’s largest 50 markets are overvalued,” said Frank Martell, president and CEO of CoreLogic. “The lack of real estate affordability has spread beyond the typically expensive coasts into the interior of the nation, hitting cities such as Denver, Nashville, Austin and Dallas.”