Home price gains in the US are about to take off again, said Corelogic Tuesday. The real estate data and analytics company predicts that annual gains in home prices could hit close to +5% by 2020, thanks to falling interest rates.
CoreLogic® Tuesday released the CoreLogic Home Price Index (HPI™) and HPI Forecast™ for February 2019, which shows home prices rose both year over year and month over month. Home prices increased nationally by +4% year-over-year from February 2018. On a month-over-month basis, prices increased by +1% in February 2019.
Average Sales Price for New Houses Sold in USA vs Benchmark Softwood Lumber Prices 2007 to 2019
Link to other graph: Average Sales Price of Houses Sold in USA vs Softwood Lumber Prices : 2007 – 2019
The CoreLogic Year-over-Year increase had been in the 5+% to +7% range for the last few years. This is the slowest twelve-month home-price growth rate since 2012. — Calculated Risk
Rising inventory of homes for sale has been helping buyers and making the market slightly more competitive for sellers. The supply is rising fastest, however, at the upper end of the price scale, not at the entry level, where demand is strongest.
New home supply on the market reached its highest level in over eight years with higher-priced homes in the Northeast and West accounting for much of the increase, according to Fitch Ratings
Median Sales Price of Houses Sold in USA vs Benchmark Softwood Lumber Prices 2007 to 2019
Link to other graph: New One-Family Houses Sold in USA vs Softwood Lumber Prices
Key Points:
- Corelogic, predicts that annual gains in home prices could hit close to +5% by 2020, thanks to falling interest rates.
- Last spring, home values were seeing an annual increase nationally of around +7%. The latest read for February of this year puts that gain at +4%, according to CoreLogic.
- “A strong buying season could lead to a pickup in home-price growth later this year,” said Frank Nothaft, chief economist at CoreLogic.
When looking at only the top 50 markets, 40 percent were overvalued, 18 percent were undervalued, and 42 percent were at value.
Frank Martell, president and CEO of CoreLogic, says the percentage of markets that are overvalued will likely grow this year.