Home prices are experiencing substantial increases both in year-over-year and month-over-month percentages, according to CoreLogic’s [1] July Home Price Insights report [2], which also provides an early indication of home price trends.
Nationally, home prices have increased in July 6.7 percent year-over-year and 0.9 percent month-over-month and are forecast to continue their increase on a 5 percent year-over-year basis. Month-over-month, CoreLogic predicts a 0.4 percent increase going into August 2017. Frank Martell, President and CEO of CoreLogic, attributes this to a combination of steadily rising purchase demand along with extremely tight inventory of unsold homes.
"While mortgage interest rates remain low, affordability cracks are emerging as over a third of U.S. top cities are now overvalued,” Martell said.
Taking a deeper look at the country’s 100 largest metro statistical areas, Denver experienced the most year-over-year growth with an 8.3 percent change. Following Denver, Las Vegas came in at 7.7 percent, San Diego at 7.2 percent, San Francisco at 7.1 percent, and Los Angeles at 6.9 percent.
Thirty-four percent of the U.S. 100 largest MSAs are experiencing overvalued housing stock, according to CoreLogic’s Market Condition Indicators data, which categorizes home prices in individual markets as undervalued, at value, or overvalued by comparing home prices to their long-run, sustainable levels. July displayed 28 percent of the 100 MSAs as being undervalued and 38 percent at value. In the top 50 MSAs, 46 percent were overvalued, 16 percent were undervalued, and 8 percent were at value.
“In July, home price growth in the Pacific Northwest and Mountain States led the nation with the highest appreciation rates,” said Dr. Frank Nothaft, Chief Economist for CoreLogic. “The sharp increase in prices in Washington and Utah has been especially striking, with home price growth in both states accelerating by 3 percentage points since the beginning of this year.”