Home price growth has registered an uptick, but at a slower pace compared to previous years, according to CoreLogic's latest Home Price Index (HPI) and HPI Forecast.
The report indicated that home prices rose 1% month-over-month in March. Year over year, home prices grew 3.7% during the month compared to the same period in 2018. While home prices have been moderating, the HPI forecast projected price growth to accelerate in the second half of 2019 to increase by 4.8% between March 2019 and March 2020.
However, growth is expected to decelerate by 0.3% month over month, between March 2019 and April 2019, the HPI report revealed.
“The U.S. housing market continues to cool, primarily due to some of our priciest markets moving into frigid waters,” said Dr. Ralph McLaughlin, Deputy Chief Economist at CoreLogic.
However, he pointed out that as supply and demand come into balance with mortgage rates remaining flat and housing supply swinging upwards, “we expect more buyers to take advantage of easing housing market headwinds.”
The report, which also covers the overall housing sentiment among consumers in high-priced markets, revealed that consumers felt high home prices had impacted rents as well. The survey saw 76% renters and buyers in this market saying that high home prices in these markets were driving up rental rates as well.
According to Frank Martell, President and CEO at CoreLogic, “The cost of either buying or renting in expensive markets puts a significant strain on most consumers.”
Additionally, he said that it was also delaying the plans of renters to enter the housing market. “Nearly half of survey respondents–44% of renters–cited the cost to rent in high-priced housing markets as the number one barrier to entry into homeownership,” Martell said. “This is potentially forcing renters to wait longer to have the necessary down payment in these communities.”
Looking at the overall housing stock across the country, the report indicated that 35% of the 100 largest metropolitan areas remained overvalued. On the other hand, 26% remained undervalued while 39% were at value, in March.
Click here to download the full report.