Home Prices Rose 6.9% YOY in April, Says CoreLogic
Irvine, CA, June 5, 2018--Home prices increased nationally by 6.9% year over year from April 2017 to April 2018, according to the CoreLogic Home Price Index (HPI) and HPI Forecast.
On a month-over-month basis, prices increased by 1.2% in April 2018-compared with March 2018-according to the CoreLogic HPI.
Looking ahead, the CoreLogic HPI Forecast indicates that the national home-price index is projected to continue to increase by 5.3% on a year-over-year basis from April 2018 to April 2019. On a month-over-month basis, home prices are expected to rise 0.2% in May 2018.
“The best antidote for rising home prices is additional supply,” said Dr. Frank Nothaft, chief economist for CoreLogic. “New construction has failed to keep up with and meet new housing growth or replace existing inventory. More construction of for-sale and rental housing will alleviate housing cost pressures.”
According to the CoreLogic Market Condition Indicators (MCI), an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock found that 40% of metropolitan areas have an overvalued housing market as of April 2018. 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). Additionally, as of April 2018, 28% of the top 100 metropolitan areas were undervalued and 32% were at value. When looking at only the top 50 markets based on housing stock, 52% were overvalued, 14% were undervalued and 34% 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.
Additionally, on May 31, CoreLogic issued the 2018 Storm Surge Report detailing the potential impact of the 2018 Hurricane season (identified as June through November) on the U.S. mainland and territories. In the report, Florida was identified as the most vulnerable state in the nation with 2.7 million homes at risk. $552 billion was the projected total cost to rebuild homes across the state if the maximum number of homes were impacted by a storm. Despite the potential impact, Florida home prices increased by 0.6% month over month, and 5.8% year over year. Home prices in the Sunshine State are projected to continue to increase by 0.8% month over month and 7.5% year over year, respectively.
“Florida continues to show price resiliency after Hurricane Irma in 2017. Despite the impact of the hurricane, prices were up 5.8% across the state compared to a year ago,” said Frank Martell, president and CEO of CoreLogic. “CoreLogic data projects continued gains to home prices in Florida for the remainder of 2018. However, gains could be erased if a significant storm makes landfall again.”