Home Prices Up Again
Home prices increased 4% year over year in December, CoreLogic said in its latest Home Price Forecast. The company now predicts the U.S. price index will rise by 5.2% come December 2020.
Throughout 2019, CoreLogic indicates the U.S. housing market experienced varied price growth. This is especially so for the nation’s lower-priced homes, which saw home prices climb significantly in 2019.
“Moderately priced homes are in high demand and short supply, pushing up values and eroding affordability for first-time buyers,” said Frank Nothaft, chief economist at CoreLogic. “Homes that sold for 25% or more below the local median price experienced a 5.9% price gain in 2019, compared with a 3.7% gain for homes that sold for 25% or more above the median.”
Out of the top 50 markets covered in the report, CoreLogic says that 40% were overvalued, 20% were undervalued and the remaining 40% were at value in December 2019.
According to the company’s data, these are the 12-month HPI changes for some of the nation’s top single-family housing markets:
- San Francisco-Redwood City-South San Francisco, California: Increased by 2.2%
- Los Angeles-Long Beach-Glendale, California: Increased by 3.3%
- Boston, Massachusetts: Increased by 3.3%
- Chicago-Naperville-Arlington Heights, Illinois: Increased by 0.8%
- Washington-Arlington-Alexandria, D.C.-Virginia-Maryland-West Virginia: Increased by 4.5%
- Denver-Aurora-Lakewood, Colorado: Increased by 3.9%
- Houston-The Woodlands-Sugar Land, Texas: Increased by 3.5%
- Las Vegas-Henderson-Paradise, Nevada: Increased by 2.9%
- Miami-Miami Beach-Kendall, Florida: Increased by 2.3%
- New York-New Jersey-White Plains, New York-New Jersey: Increased by 0.1%
Overvalued markets have homes that 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.