U.S. home prices increased 0.1% in January compared with December and were up 4.0% compared with January 2019, according to the CoreLogic Home Price Index.
Connecticut was the only state to post an annual decline in home prices, while Idaho experienced the largest gain at 10.5%
CoreLogic notes that its December 2019 data was revised.
“January marked the third consecutive month that annual home price growth accelerated in our national index, as low mortgage rates and rising income supported home sales,” says Frank Nothaft, chief economist at CoreLogic in a statement. “In February, mortgage rates fell to the lowest level in more than three years, which likely will spur additional home shopping activity and price appreciation.”
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% of metropolitan areas had an overvalued housing market as of January, while 29% were undervalued and 38% were at value.
When looking at only the top 50 markets based on housing stock, 38% were overvalued, 24% were undervalued and 38% were at value.
The MCI analysis defines an overvalued housing market as one in which home prices are at least 10% above the long-term, sustainable level.
An undervalued housing market is one in which home prices are at least 10% below the sustainable level.
“Despite a slowdown in home price growth last summer, annual appreciation is beginning to stabilize,” says Frank Martell, president and CEO of CoreLogic. “While just under half of millennials feel confident they can afford to purchase a home, housing starts have shot up, and mortgage rates have come down, which has helped improve affordability and spur overall housing demand.”
CoreLogic is forecasting that U.S. home prices will rise 5.4% by January 2021.