Home prices increased by 0.3% in July compared to the previous month but were up 6.2% year-over-year.
CoreLogic’s latest Home Price Index shows that price increases are slowing, which may be bad news for the many homeowners who are holding back on selling in the hopes of continued sharp price rises.
“With increased interest rates and home prices, the CoreLogic Home Price Index is rising at a slower rate than it was earlier this year,” said Dr. Frank Nothaft, chief economist for CoreLogic. “While markets in the western part of the country continue to experience rapid home-price growth, many of those metros are overvalued, and will likely experience a slowdown soon.”
The firm’s data reveals that 40% of the 100 largest metros in the US are overvalued, 20% are undervalued, and 40% are at value.
Price growth set to slow
CoreLogic’s HPI Forecast calls for an easing of nationwide price rises to 5.1% for the year from July 2018 to July 2019. Prices are also expected to decrease by 0.2% in the month from July-August 2018.
“Many consumers see their homes as good investments,” said Frank Martell, president and CEO of CoreLogic. “Our consumer research indicates homeowners, especially those in high-price growth markets, are confident that by waiting to sell, they will receive a greater return on investment than they would today. In other words, sellers are largely staying put. With fewer homes on the market, price pressure will continue to rise.”
More market update: