More affordable real estate is on the horizon for fortunate future homeowners. According to CoreLogic’s most recent U.S. Home Price Insights report, home prices are stalling, and only grew 0.9 percent during July and August. The firm suspected that growth would slow down even more with prices rising just 0.1 percent for the month of September.
From August 2017 to August 2018, CoreLogic forecasts a price growth of just 4.7 percent. That’s the lowest annual growth rateCoreLogic’s Chief Economist, Frank Nothaft, has seen in three years.
“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,” he said. “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.”
After analyzing 100 of the country’s largest metropolitan areas based on housing stock as of August 2017, an overvalued housing stock was discovered in 34 of cities in the nation. As of August 2017, after CoreLogic Marketing Conditions Indicators (MCI) categorized home prices in individual markets as undervalued, at value, or overvalued, they found that 34 percent of cities in the nation have an overvalued housing stock, determined by doing a comparison between home prices to their long-run, sustainable levels, which are supported by local market fundamentals such as disposable income.
The top 100 metropolitan areas had 27 percent undervalued housing stock, and 39 percent at value housing stock. In the top 50 markets, overvalued housing stock equaled 46 percent, undervalued housing stock equaled 16 percent, and at value housing stock equaled 38 percent.
While the MCI 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,” said 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.”