In June, home prices rose 3.4 percent year-over-year, with a 0.4 percent change from May, according to CoreLogic’s latest Home Price Index (HPI™) report. Home prices are projected to rise 5.2 percent this year, the report shows.
Thirty-eight 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 to the HPI report; 38 percent are at-value; and 24 percent are undervalued (“at least 10 percent below the long-term, sustainable” trend). Across the 50 largest markets, 42 percent are overvalued, 42 percent are at-value and 16 percent are undervalued.
“Tepid home sales have caused home prices to rise at the slowest pace for the first half of a year since 2011,” says Dr. Frank Nothaft, chief economist at CoreLogic. “Price growth continues to be faster for lower-priced homes, as first-time buyers and investors are both actively seeking entry-level homes. With incomes up and current mortgage rates about 0.8 percentage points below what they were one year ago, home sales should have a better sales pace in the second half of 2019 than a year earlier, leading to a quickening in price growth over the next year.”
According to an accompanying CoreLogic and RTi Research study, buying a home in their local market is “at least somewhat affordable” for 37 percent of millennials.
“Millennial homebuyers are no longer a trend on the industry horizon; in fact, they are the new, first-time homebuyers of today,” says Frank Martell, president and CEO of CoreLogic. “However, only about half of recent millennial buyers were satisfied with the number of options of available homes in their market or price range. Affordable housing continues to be a growing issue. A deeper look at the data shows that 43 percent of those surveyed indicated they couldn’t afford to buy a new home or are concerned they won’t be able to.”
For more information, please visit www.corelogic.com.