U.S. home prices increased 0.9% in July compared with June and increased 6.7% compared with July 2016, according to CoreLogic.
The Western states led the nation in home price growth in July, with Washington and Utah experiencing double-digit year-over-year increases.
“In July, home price growth in the Pacific Northwest and mountain states led the nation with the highest appreciation rates,” says Frank Nothaft, chief economist for CoreLogic, in a statement. “The sharp increase in prices in Washington and Utah has been especially striking, with home price growth in both states accelerating by 3 percentage points since the beginning of this year.”
Interestingly, an analysis show that more than one-third of U.S. housing stock in the top cities is “overvalued.” According to the firm’s Market Conditions Indicators (MCI) data, 34% of the housing in the largest metros is overvalued. CoreLogic arrived at this conclusion by comparing home prices to their long-run, sustainable levels, which are supported by local market fundamentals, such as disposable income.
“Home prices in July continued to rise at a solid pace with no signs of slowing down,” says Frank Martell, president and CEO of CoreLogic. “The combination of steadily rising purchase demand along with very tight inventory of unsold homes should keep upward pressure on home prices for the remainder of this year. While mortgage interest rates remain low, affordability cracks are emerging as over a third of U.S. top cities are now overvalued.”
CoreLogic is forecasting that home prices will increase by 0.4% from July 2017 to August 2017 and by 5% from July 2017 to July 2018.