U.S. home prices continued to rise in July, inching up 0.3% compared with June and jumping 6.2% compared with July 2017, according to CoreLogic’s home price index report.
Washington, Nevada and Idaho once again posted double-digit annual gains, according to the report.
Currently, the software, data and analytics firm is forecasting that home prices will increase 0.2% from July to August and 5.1% by the end of July 2019.
Although home prices have been on the rise for the past two years, Frank Nothaft, chief economist for CoreLogic, points out that the rate of appreciation appears to be slowing.
“With increased interest rates and home prices, the [index] is rising at a slower rate than it was earlier this year,” Nothaft says in a statement. “While markets in the western part of the country continue to experience rapid home-price growth, many of those metros are overvalued, and will likely experience a slowdown soon.”
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, 40% of metropolitan areas had an “overvalued” housing market as of July.
What’s more, about 50% of the top 50 markets are considered “overvalued.”
Interestingly, a survey of homeowners recently conducted by CoreLogic and RTi Research of Norwalk, Conn., reveals that 62% of residents in these high-growth markets expect their homes will be worth more in three years than they are today.
“Many consumers see their homes as good investments,” says Frank Martell, president and CEO of CoreLogic. “Our consumer research indicates homeowners, especially those in high-price growth markets, are confident that by waiting to sell, they will receive a greater return on investment than they would today. In other words, sellers are largely staying put. With fewer homes on the market, price pressure will continue to rise.
