Photo: Robert Clark
The start of the summer homebuying season in the US was a particularly potent mix of high demand and abysmally low supply.
The bad news for homebuyers is that conditions are not likely to change as we move into fall, according to a report released today by the property analytics and intelligence firm CoreLogic.
National home prices, including distressed sales, were up 6.7 percent annually and 0.9 percent from the previous month in July. CoreLogic says that national home prices are now 50 percent above March 2011’s bottom, recorded during the Great Recession.
The summer cocktail of high demand and low supply is likely to spill over into the fall and possibly even the winter months ahead.
“The combination of steadily rising purchase demand along with very tight inventory should keep upward pressure on home prices for the remainder of this year,” says Frank Martell, President and CEO of CoreLogic, in a digital release.
Every state recorded year-over-year increases except West Virginia, while Utah and Washington State recorded double-digit gains, at 10.8 percent and 12.9 percent, respectively. The Pacific Northwest and mountain regions of the country led the country with the largest gains in price appreciation, says CoreLogic.
“The sharp increase in prices in Washington and Utah has been especially striking, with home price growth in both states accelerating by 3 percentage points since the beginning of this year,” CoreLogic’s Chief Economist Frank Nothaft says in the report.
Home prices in New York, one of the country’s most expensive markets, were up over 7 percent from last year in July.
“Prices in July continued to rise at a solid pace with no signs of slowing down,” says CoreLogic’s Martell.
Currently, over one-third of the country’s top cities are “overvalued” in terms of housing stock. A housing market is generally considered to be overvalued when prices are at least 10 percent higher than the long-term, sustainable level.
Some 16 percent of US housing markets are considered “undervalued,” while 38 percent were fairly valued, according to CoreLogic’s HPI.
“While mortgage interest rates remain low, affordability cracks are emerging as over a third of the US top cities are now overvalued,” says Martell in the report.
National home prices are projected to increase 5 percent year-over-year in July 2018, according to data from the CoreLogic Home Price Insights (HPI) Forecast. CoreLogic anticipates prices will rise nationwide by 0.4 percent from July 2017 to August 2017.
Click here to read the entire report.