In March, home prices rose 3.7 percent year-over-year, with a 1 percent change from February, according to CoreLogic’s latest Home Price Index (HPI™) report. The average home price is projected to rise 4.8 percent this year, the report shows. In high-priced markets, more than three-quarters (76 percent) of homebuyers and renters believe prices are pushing up rents, according to additional CoreLogic research.
“The cost of either buying or renting in expensive markets puts a significant strain on most consumers,” says Frank Martell, president and CEO of CoreLogic. “Nearly half of survey respondents—44 percent of renters—cited the cost to rent in high-priced housing markets as the No. 1 barrier to entry into homeownership. This is potentially forcing renters to wait longer to have the necessary down payment in these communities.”
Thirty-five percent of the 100 largest markets are overvalued, a condition CoreLogic defines as when “home prices are at least 10 percent higher than the long-term, sustainable” trend, according to the HPI report; 39 percent are at-value; and 26 percent are undervalued (“at least 10 percent below the long-term, sustainable” trend).
“The U.S. housing market continues to cool, primarily due to some of our priciest markets moving into frigid waters,” says Dr. Ralph McLaughlin, deputy chief economist at CoreLogic, “but the broader market looks more temperate as supply and demand come into balance. With mortgage rates flat and inventory picking up, we expect more buyers to take advantage of easing housing market headwinds.” For more information, please visit www.corelogic.com.