Home Prices Rose 7% YOY in March, CoreLogic
Irvine, CA, May 1, 2018-Home prices increased nationally by 7% year over year from March 2017 to March 2018, while on a month-over-month basis, prices increased by 1.4% in March 2018, according to the CoreLogic Home Price Index (HPI).
Looking ahead, the CoreLogic HPI Forecast indicates that the national home-price index is projected to continue to increase by 5.2% on a year-over-year basis from March 2018 to March 2019. On a month-over-month basis, home prices are expected to rise 0.1% in April 2018. The
“Home prices grew briskly in the first quarter of 2018,” said Dr. Frank Nothaft, chief economist for CoreLogic. “High demand and limited supply have pushed home prices above where they were in early 2006. New construction still lags historically normal levels, keeping upward pressure on prices.”
According to CoreLogic Market Condition Indicators (MCI) data, 37% of metropolitan areas have an overvalued housing market as of March 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 March 2018, 28% of the top 100 metropolitan areas were undervalued and 35% were at value. When looking at only the top 50 markets based on housing stock, 50% were overvalued, 14% were undervalued and 36% 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.
“The dream of homeownership continues to fade away for the average prospective buyer. Lower-priced homes are appreciating much faster than higher-priced properties, making the affordability crisis progressively worse,” said Frank Martell, president and CEO of CoreLogic. “CoreLogic’s Market Condition Indicators now indicate that half of the top 50 markets in the country are overvalued because home prices in those areas have risen so much faster than incomes. This is clearly an unsustainable condition that can only be remedied by aggressive and coordinated public/private sector actions.”