U.S. home prices rose 3.4% in June compared with the same month a year ago, according to data from CoreLogic released Tuesday in the firm’s Home Price Insights monthly report. The data includes sales of distressed properties.
Home prices rose 0.4% month over month in June. On a year-over-year basis, the index has increased every month since March 2012 and is up more than 61% since bottoming out in March 2011.
CoreLogic forecasts housing prices to rise by 5.2% year over year and by 0.5% month over month in June 2020.
As of June 2019, home prices are now about 8.5% higher than they were at the April 2006 pre-crash peak. Adjusted for inflation, however, home prices remain about 11.4% below the peak.
CEO Frank Martell noted:
Millennial homebuyers are no longer a trend on the industry horizon. In fact, they are the new, first-time homebuyers of today. 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% of those surveyed indicated they couldn’t afford to buy a new home or are concerned they won’t be able to.
CoreLogic Chief Economist Frank Nothaft added:
Tepid home sales have caused home prices to rise at the slowest pace for the first half of a year since 2011. 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.
Including distressed sales, home prices rose the most year over year in Idaho, Utah, Nevada and Indiana. Home prices rose in all states except Connecticut, Delaware and South Dakota.
Through June, 38% of the top 100 metropolitan areas were overvalued, 24% were undervalued and 38% were at value. In just the top 50 markets based on housing stock, 42% were overvalued, 16% 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 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 change, up 6.4% in June. Denver is up 3.8%, with Washington, D.C., (up 3.7%), Miami (up 3.1%) and Los Angeles (up 2.8%) rounding out the top five.
Visit the CoreLogic website for the full June report.