In January, home prices rose 4.4 percent year-over-year, with an 0.1 percent change from December, according to CoreLogic’s latest Home Price Index (HPI™) report. Additionally, the average home price is projected to rise 3.4 percent this year.
Thirty-five percent of the 100 largest markets are overvalued, a condition CoreLogic defines as when “home prices are at least 10 percent higher than the long-term, sustainable” trend, according the report; 38 percent are at a value; and 27 percent are undervalued (“at least 10 percent below the long-term, sustainable” trend).
“The spike in mortgage interest rates last fall chilled buyer activity and led to a slowdown in home sales and price growth,” says Dr. Frank Nothaft, chief economist for CoreLogic. “Fixed-rate mortgage rates have dropped 0.6 percentage points since Nov. 2018 and today are lower than they were a year ago.”
“The slowing growth in home prices was inevitable in many respects, as buyers pull back in the face of higher borrowing and ownership costs,” says Frank Martell, president and CEO of CoreLogic. “As we head into 2019, we can expect continued strong employment growth and rising incomes, which could support a reacceleration in home price appreciation later this year.”
“With interest rates at this level, we expect a solid home-buying season this spring,” Nothaft says.
For more information, please visit www.corelogic.com.