Home prices rose both year over year and month over month, according to a recent study from CoreLogic. The CoreLogic Home Price Index (HPI) and HPI Forecast for July 2018 shows a 6.2 percent year over year from July 2017 to July 2018, as well as a 0.3 percent in July 2018 month over month.
“With increased interest rates and home prices, the CoreLogic Home Price Index is rising at a slower rate than it was earlier this year,” said Dr. Frank Nothaft, Chief Economist for CoreLogic. “While markets in the western part of the country continue to experience rapid home-price growth, many of those metros are overvalued, and will likely experience a slowdown soon.”
CoreLogic predicts the national home-price index to continue to increase by 5.1 percent year over year in July 2019, but expects the index to decrease by 0.2 percent month over month in August 2018.
The CoreLogic Market Condition Indicators found that 40 percent of metropolitan areas had an overvalued market in July, meaning home values were 10 percent below the sustainable level. According to the Indicators, while 40 percent were at value. 20 percent of the top 100 metropolitan areas were undervalued.
Additionally, 50 percent of the top 50 markets are considered overvalued. However, 62 percent of residents in these high-growth markets are holding off on selling, as they believe their home value will increase within three years. CoreLogic also notes that 47 percent of residents in high-price growth markets and 31 percent in lower growth markets feel they are in a “sellers’ market,” meaning these buyers are holding off on selling.
“Many consumers see their homes as good investments,” said Frank Martell, President and CEO of CoreLogic. “Our consumer research indicates homeowners, especially those in high-price growth markets, are confident that by waiting to sell, they will receive a greater return on investment than they would today. In other words, sellers are largely staying put. With fewer homes on the market, price pressure will continue to rise.”
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