US home prices continued their upward trend in December, the fifth straight month of gains
US home prices continued their upward trend in December, the fifth straight month of gains.
CoreLogic’s Home Price Index was up 6.6% year-over-year and 0.5% month-over-month, led by gains in five western states, and driven by ever-tightening inventory.
“The number of homes for sale has remained very low,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Job growth lowered the unemployment rate to 4.1% by year’s end, the lowest level in 17 years. Rising income and consumer confidence has increased the number of prospective homebuyers. The net result of rising demand and limited for-sale inventory is a continued appreciation in home prices.”
The states with the highest price rises were: California, Idaho, Nevada, Utah and Washington.
“As home prices and the cost of originating loans rise, affordability continues to erode, making it more challenging for both first time buyers and moderate-income families to buy,” added CoreLogic CEO Frank Martell.
The firm estimates that 38% of the 100 largest metropolitan areas were overvalued as of the end of December 2017, with 28% undervalued and 37% at value.
However, when looking at just the top 50 markets, the share that are estimated to be overvalued rises to 48% (14% undervalued, 38% at value).
Looking ahead, CoreLogic expects a slowing of price appreciation with a 0.4% decrease from December to January and increase by 4.3% on a year-over-year basis from December 2017 to December 2018.
