U.S. home prices rose 3.7% in March compared with the same month a year ago, according to CoreLogic data released Tuesday in the firm’s Home Price Insights monthly report. The data includes sales of distressed properties.
Home prices rose 1% month over month in March. On a year-over-year basis, the index has increased every month since February 2012, and it is up 59% since bottoming out in March 2011.
CoreLogic forecasts housing prices to rise by 4.8% year over year in March 2020 and to drop by 0.3% month over month in March of next year.
As of March 2019, home prices are now about 6.9% higher than they were at the April 2006 precrash peak. Adjusted for inflation, however, home prices remain about 12.5% below the peak.
CEO Frank Martell noted:
The cost of either buying or renting in expensive markets puts a significant strain on most consumers. Nearly half of survey respondents – 44% of renters – cited the cost to rent in high-priced housing markets as the number one barrier to entry into homeownership. This is potentially forcing renters to wait longer to have the necessary down payment in these communities.
Deputy Chief Economist Ralph McLaughlin added:
The U.S. housing market continues to cool, primarily due to some of our priciest markets moving into frigid waters. But the broader market looks more temperate as supply and demand come into balance. With mortgage rates flat and inventory picking up, we expect more buyers to take advantage of easing housing market headwinds.
Including distressed sales, home prices rose the most year over year in Idaho (10.5%), Maine (9.1%) and Utah (7.8%), which all rank among the least valuable states in terms of land value.
Through March, 35% of the top 100 metropolitan areas were overvalued, 26% were undervalued and 39% were at value. In just the top 50 markets based on housing stock, 40% were overvalued, 16% were undervalued and 39% 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 8.0%, and it is among the fastest growing cities in the United States. Denver is up 4.1%, with Houston (up 3.5%), Miami (up 3.4%) and Washington, D.C., (up 3%) rounding out the top five.
Check out CoreLogic’s March report for more detail.