Home price gains picked up steam at year-end, CoreLogic says
Forget the rent - home purchase prices may soon be “too damn high.”
Nationally, prices rose 6.6% for the 12 months ending in December, real-estate data provider CoreLogic said Tuesday. That marked the fourth month in a row in which annual increases were higher than in the prior month.
“Affordability continues to erode, making it more challenging for both first time buyers and moderate-income families to buy,” CoreLogic said in a release. “At this point, we estimate that more than one-third of the 100 largest metropolitan areas are overvalued.”
The top three “overvalued” metro areas in CoreLogic’s analysis were Las Vegas, where prices were 11.2% higher than a year ago in December; Denver, where they jumped 8.1% for the year; and Los Angeles, where prices rose 7.8% for the year.
“Overvalued” isn’t just a reflection of “biggest price gain,” however. San Francisco home values rose 10.1% for the year, after years of pricing people out, but CoreLogic only judges prices there to be “at value.”
Looking ahead, CoreLogic forecasts home prices will rise 4.3% in the year ending December 2018. But this is a good time for a reminder that home price growth just keeps leaving analyst estimates in the dust.
For now, lower mortgage rates are helping ease some of that affordability issue. A monthly analysis by the Urban Institute’s housing finance center found rates would have to breach 4.75% before affordability really becomes problematic across the country.
Still, that’s the big-picture national look. Local markets, unique household circumstances, and individual life situations may hold far different stories, especially in the most inventory-strapped areas.
By Andrea Riquier- Marketwatch