U.S. home prices up 6.9 percent in August


IRVINE
October 3, 2017 5:33am


•  Prices projected to increase 4.7 percent by next August

•  “Nearly half of the nation's largest 50 markets are overvalued”

•  Stockton leads Valley in price increases


Home prices nationally increased year over year by 6.9 percent from August 2016 to August, and on a month-over-month basis, home prices increased by 0.9 percent in August compared with July, according to a new report Tuesday from real estate financial information company CoreLogic Inc. (NYSE: CLGX) of Irvine.

Looking ahead, Corelogic’s proprietary “Home Price Index” indicates that home prices will increase by 4.7 percent on a year-over-year basis from August to August 2018. The CoreLogic HPI Forecast is a projection of home prices 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.

"While growth in home sales has stalled due to a lack of inventory during the last few months, the tight inventory has actually helped stabilize price growth," says Frank Nothaft, chief economist for CoreLogic. "Over the last three years, price growth in the CoreLogic national index has been between 5 percent and 7 percent per year, and CoreLogic expects home prices to increase about 5 percent by this time next year."

In an analysis of the country's 100 largest metropolitan areas based on housing stock, 34 percent of cities have an overvalued housing stock as of August, according to CoreLogic Market Conditions Indicators data. 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.

Also as of August, 27 percent of the top 100 metropolitan areas were undervalued and 39 percent were at value. When looking at only the top 50 markets based on housing stock, 46 percent were overvalued, 16 percent were undervalued and 38 percent were at value, according to CoreLogic.

The MCI analysis defines an overvalued housing market as one in which home prices are at least 10 percent higher than the long-term, sustainable level, while an undervalued housing market is one in which home prices are at least 10 percent below the sustainable level.

"Nearly half of the nation's largest 50 markets are overvalued," says Frank Martell, president and CEO of CoreLogic. "The lack of real estate affordability has spread beyond the typically expensive coasts into the interior of the nation, hitting cities such as Denver, Nashville, Austin and Dallas."

Almost all markets in the Central Valley are outpacing the national average for price increases.

Here are CoreLogic’s market summaries:

• Home Prices in Stockton-Lodi Increase

In Stockton-Lodi, home prices, including distressed sales, increased by 9.1 percent in August compared with August 2016. On a month-over-month basis, home prices, including distressed sales, increased by 0.3 percent in August compared with July.

• Home Prices in metro Sacramento Increase

In metropolitan Sacramento, which includes the city of Roseville and the unincorporated county area known as Arden-Arcade, home prices, including distressed sales, increased by 9.0 percent in August compared with August 2016. On a month-over-month basis, home prices, including distressed sales, increased by 0.6 percent in August compared with July.

• Home Prices in Fresno Increase

In Fresno, home prices, including distressed sales, increased by 8.8 percent in August compared with August 2016. On a month-over-month basis, home prices, including distressed sales, increased by 1.1 percent in August compared with July.

• Home Prices in Modesto Increase

In Modesto, home prices, including distressed sales, increased by 8.3 percent in August compared with August 2016. On a month-over-month basis, home prices, including distressed sales, increased by 0.1 percent in August compared with July.

• Home Prices in Visalia-Porterville Increase

In Visalia-Porterville, home prices, including distressed sales, increased by 8.1 percent in August compared with August 2016. On a month-over-month basis, home prices, including distressed sales, increased by 0.7 percent in August compared with July.

• Home Prices in Madera Increase

In Madera, home prices, including distressed sales, increased by 7.2 percent in August compared with August 2016. On a month-over-month basis, home prices, including distressed sales, decreased by 0.6 percent in August compared with July.

• Home Prices in Merced Increase

In Merced, home prices, including distressed sales, increased by 6.1 percent in August compared with August 2016. On a month-over-month basis, home prices, including distressed sales, increased by 0.4 percent in August compared with July.

• Home Prices in Bakersfield Increase

In Bakersfield, home prices, including distressed sales, increased by 5.0 percent in August compared with August 2016. On a month-over-month basis, home prices, including distressed sales, increased by 0.8 percent in August compared with July.

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