CoreLogic Reports December Home Prices Increased by 4.7 Percent Year over Year
IRVINE, Calif.–(BUSINESS WIRE)–Feb 5, 2019–CoreLogic ® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released the CoreLogic Home Price Index (HPI ™ ) and HPI Forecast ™ for December 2018, which shows home prices rose both year over year and month over month. Home prices increased nationally by 4.7 percent year over year from December 2017. On a month-over-month basis, prices increased by 0.1 percent in December 2018. ( November 2018 data was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results each month.)
Looking ahead, the CoreLogic HPI Forecast indicates home prices will increase by 4.6 percent on a year-over-year basis from December 2018 to December 2019. Comparing the annual average HPI and HPI forecast for 2018 and 2019, average price growth is forecasted to slow from 5.8 percent to 3.4 percent. On a month-over-month basis, home prices are expected to decrease by 1 percent from December 2018 to January 2019. The CoreLogic HPI Forecast is a projection of home prices calculated using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.
“Higher mortgage rates slowed home sales and price growth during the second half of 2018,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Annual price growth peaked in March and averaged 6.4 percent during the first six months of the year. In the second half of 2018, growth moderated to 5.2 percent. For 2019, we are forecasting an average annual price growth of 3.4 percent.”
According to the CoreLogic Market Condition Indicators (MCI), an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock, 33 percent of metropolitan areas have an overvalued housing market as of December 2018. The MCI analysis categorizes home prices in individual markets as undervalued, at value or overvalued, by comparing home prices to their long-run, sustainable levels, which are supported by local market fundamentals (such as disposable income). Additionally, as of December 2018, 27 percent of the top 100 metropolitan areas were undervalued, and 40 percent were at value.
When looking at only the top 50 markets based on housing stock, 40 percent were overvalued, 18 percent were undervalued and 42 percent were at value. The MCI analysis defines an overvalued housing market as one in which home prices are at least 10 percent above the long-term, sustainable level. An undervalued housing market is one in which home prices are at least 10 percent below the sustainable level.
In 2018, CoreLogic together with RTi Research of Norwalk, Connecticut, conducted an extensive survey measuring consumer-housing sentiment, combining consumer and property insights. The study assessed attitudes toward homeownership and the driving force behind the decision to buy or rent a home. When renters were asked how interested they were in owning a home or residence, 36 percent felt homeownership would allow them to fulfill a dream and provide a place to raise a family. Conversely, 45 percent of those surveyed claimed they could not afford to buy or take on the responsibility of ownership at this time. As home-price increases cool while incomes rise, we expect buyer affordability to improve and home sales to pick up.
“The slowdown in the rate of home price appreciation reflects the impact of inventory shortages and growing affordability issues in many markets,” said Frank Martell, president and CEO of CoreLogic. “On the positive side, if home-price growth continues to moderate, interest rates remain stable and household incomes rise in 2019, it could help renters and first-time buyers to take the plunge and realize the dream of owning a home.”
The next CoreLogic HPI press release, featuring January 2019 data, will be issued on Tuesday, March 5, 2019 at 8:00 a.m. ET.
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.