Home prices rose both year over year and month over month in February, according to the CoreLogic Home Price Index (HPI) and HPI Forecast for February 2019. According to the HPI, home prices increased 4 percent year over year from February 2018, and 0.7 percent in month over month in February 2019.
“During the first two months of the year, home-price growth continued to decelerate,” said 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 pickup in home-price growth later this year.”
The Forecast indicates that home prices are expected to decrease by 0.5 percent from February 2019 to March 2019 on a month over month basis, and increase by 4.7 percent on a year over year basis from February 2019 to February 2020.
Corelogic also looked at data by metro area, and according to the CoreLogic Market Condition Indicators, 35 percent of the 100 largest metropolitan areas in the country were overvalued as of February 2019. Another 27 percent were indicated as being undervalued, while 38 percent were at value.
“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. The cost of either buying or renting in expensive markets puts a significant strain on most consumers,” said Frank Martell, President and CEO of CoreLogic. “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.
Learn more about the CoreLogic HPI here.