The Scotsman Guide - Victor Whitman - 03 OCt 2017
After another month of strong home price gains in August, the U.S. housing market was fast approaching a concerning threshold for affordability. Nearly half of the housing markets among the top 100 U.S. metros were “overvalued,” according to CoreLogic.
As of late August, home prices in 46 of the top U.S. cities were 10 percent higher than their long-run, sustainable average, the company said. CoreLogic said that 16 metros were undervalued and 38 cities were at value.
"The lack of real estate affordability has spread beyond the typically expensive coasts into the interior of the nation, hitting cities such as Denver, Nashville, Austin and Dallas," said Frank Martell, president and CEO of CoreLogic.
CoreLogic’s price index rose 6.9 percent year over year, and was up 0.9 percent over the July level. Prices rose the most in Washington state (up 13 percent year over year) and Utah (up 11.2 percent). Top gainers among metros included Las Vegas (up 8.4 percent), Denver (up 8.3 percent) and San Francisco (up 7.7 percent).
CoreLogic’s Chief Economist Frank Nothaft said that tight inventories have stalled home sales, but have also stabilized price growth in the 5 percent to 7 percent range. Home prices have risen within that range for the past three years. During the recovery phase of the housing market in 2012 and 2013, national price indices rose by over 10 percent. During the peak of the last housing bubble in 2006, the index rose by 15 percent year over year, and fell by more than 15 percent during the point in 2008.
"Over the last three years, price growth in the CoreLogic national index has been between 5 percent and 7 percent per year, and CoreLogic expects home prices to increase about 5 percent by this time next year," Nothaft said.