Home prices rose 5.1 percent in November 2018, compared to the same period in 2017, according to CoreLogic's Home Price Index (HPI) and the HPI forecast released on Wednesday. The report projects home prices calculated using the CoreLogic HPI and other economic variables.
While home prices showed an increase year over year and month over month in November, the report forecast a decrease in home price growth in 2019 projecting home prices to grow by 4.8 percent on a year-over-year basis from November 2018 to November 2019. Month over month too, the report forecast a drop in home price growth by 0.8 percent from November 2018 to December 2o18.
"The rise in mortgage rates has dampened buyer demand and slowed home-price growth," said Dr. Frank Nothaft, Chief Economist at CoreLogic. "These higher rates and home prices have reduced buyer affordability."
The report also included the CoreLogic Market Conditions Indicators (MCI), which analyze the housing values in 100 largest metropolitan areas across the U.S. It indicated that while 35 percent of the metros had an overvalued housing market, 27 percent were undervalued, and 38 percent remained at value.
The projected drop in home prices during the year as well as recent declines in the stock market are likely to see homeowners changing their selling strategy. In fact, according to Nothaft, home sellers are already responding to the reduced buyer affordability by "lowering their asking price, which is reflected in the slowing growth of the CoreLogic Home Price Index."
"A strong economy helps homeowners feel confident about the value of their property," said Frank Martell, President and CEO, CoreLogic. "If recent declines in the stock market shake consumer confidence in the national economy, we may see homeowners' perception of home value change and a subsequent buyers' market emerge in 2019."
At a state-level, the report found that North Dakota was the only state to show a year-over-year decline in home prices in November, while Idaho and Nevada showed double-digit growth. At a metro level, Las Vegas posted the maximum gains in home prices at 11.7 percent followed by Denver (6.6 percent); San Francisco (5.9 percent); Los Angeles (5.3 percent); and Boston (5.1 percent).
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