U.S. home prices rose 6.8% in June compared with the same month a year ago, according to data from CoreLogic released Tuesday in the research firm’s Home Price Insights monthly report. The data include sales of distressed properties.
Since the housing market bottomed in March 2011, the CoreLogic index has risen by 57.3%. As of June, home prices were 5.2% higher than they were at the April 2006 pre-crash peak. Adjusted for inflation, however, home prices are 13.3% below the April 2006 peak.
Month over month, June prices rose 0.7%, including distressed home sales. CoreLogic expects housing prices to rise by 5.1% year over year by June 2019 and to remain unchanged month over month in July 2018.
CEO Frank Martell noted:
One-third of millennial renters reported feeling they cannot afford a down payment to buy a home. With home prices rising quickly over the past few years and supplies low, first-time homebuyers face ever-growing challenges to find and buy affordable entry-level homes. More needs to be done to help our first-time buyers join the homeownership class.
Chief Economist Frank Nothaft added:
The rise in home prices and interest rates over the past year has eroded affordability and is beginning to slow existing home sales in some markets. For June, we found in CoreLogic public records data that home sales in the San Francisco Bay Area and Southern California were down 9 and 12 percent, respectively, from one year earlier. Further increases in home prices and mortgage rates over the next year will likely dampen sales and home-price growth.
Including distressed sales, home prices rose the most year over year in Nevada (12.6%), Washington (12.1%), Idaho (11.4%) and Utah (10.4%).
Through June, 41% of the top 100 metropolitan areas were overvalued, 24% were undervalued and 35% were at value. When looking at only the top 50 markets based on housing stock, 54% were overvalued, 14% were undervalued and 32% were at value. CoreLogic defines an overvalued housing market as one in which home prices are at least 10% higher than the long-term, sustainable level, while an undervalued housing market is one in which home prices are at least 10% below the sustainable level.
Among U.S. metro areas Las Vegas has posted the largest year-over-year index gain, up 12.9%. Seattle is up 11.2%, Denver is up 8.1% and Boston is up 8% to round out the top five.