CoreLogic January Home Price Index Maintains Slow Growth Path
U.S. home prices rose 4.4% in January 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.
Home prices rose 0.1% month over month in January. On a year-over-year basis, the index has increased every month since February 2012 and is up 58% since bottoming out in March 2011.
CoreLogic expects housing prices to rise by 4.6% year over year and to drop by 0.9% month over month in January 2020.
As of January, home prices are now about 6.1% higher than they were at the April 2006 pre-crash peak. Adjusted for inflation, however, home prices remain about 13.1% below the April 2006 peak.
CEO Frank Martell noted:
The slowing growth in home prices was inevitable in many respects as buyers pull back in the face of higher borrowing and ownership costs. 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.
Chief Economist Frank Nothaft added:
The spike in mortgage interest rates last fall chilled buyer activity and led to a slowdown in home sales and price growth. Fixed-rate mortgage rates have dropped 0.6 percentage points since November 2018 and today are lower than they were a year ago. With interest rates at this level, we expect a solid home-buying season this spring.
Including distressed sales, home prices rose the most year over year in Idaho (11.2%), Nevada (10.2%) and Utah (8.9%).
Through January, 35% of the top 100 metropolitan areas were overvalued, 27% were undervalued and 38% were at value. In just the top 50 markets based on housing stock, 40% were overvalued, 18% were undervalued and 42% 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 where 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 change, up 10.5%. Denver is up 4.8%, with Miami (up 4.5%), Boston (up 4.2%) and Houston (up 4%) rounding out the top five.
CoreLogic’s January home price index report is available at the company’s website.