In July, home prices rose 3.6 percent year-over-year, climbing 0.5 percent from June, according to CoreLogic’s latest Home Price Index (HPI™) report. Home prices are projected to rise 5.4 percent this year, the report shows.
Thirty-seven 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; 40 percent are at-value; and 23 percent are undervalued (“at least 10 percent below the long-term, sustainable” trend). Across the 50 largest markets, 40 percent are overvalued, 44 percent are at-value and 16 percent are undervalued.
“Sales of new and existing homes this July were up from a year ago, supported by low mortgage rates and rising family income,” says Dr. Frank Nothaft, chief economist at CoreLogic. “With the for-sale inventory remaining low in many markets, the pick-up in buying has nudged price growth up. If low interest rates and rising income continue, then we expect home-price growth will strengthen over the coming year.”
According to another CoreLogic survey, in conjunction with RTi Research, 26 percent of millennials expressed interest in purchasing in the upcoming year, but only 8 percent were interested in listing.
“A growing number of millennials are expressing an interest in buying homes, reinforcing the theory that this cohort is continuing to engage within the housing market,” says Frank Martell, president and CEO of CoreLogic. “But, with so few homes available for sale, the imbalance has created an affordability crisis that is getting worse every day. Demand exceeds supply and we’re unsure of when the two will balance out.”
For more information, please visit www.corelogic.com.