U.S. home prices have swelled nearly 50% higher than their low point in the wake of the last recession, reflecting a shrinking inventory and stoking fears of overheating in certain markets.
Home prices in June 2017 were riding 6.7% higher than at the same time in 2016, according to the most recent data from real estate research firm CoreLogic, and 1.1% higher than in May.
“The growth in sales is slowing down, and this is not due to a lack of affordability — but rather a lack of inventory,” CoreLogic chief economist Frank Nothaft said in the firm’s most recent report. “As of Q2 2017, the unsold inventory as a share of all households is 1.9%, which is the lowest Q2 reading in over 30 years.”
The Irvine, Calif.-based research firm thus projects slightly softer growth over the coming 12 months, with a year-over-year gain of 5.2% predicted by June 2018. That’s still impressive considering that this June’s figure represents a nearly 50% boost from March 2011, when home prices bottomed out in the wake of the mortgage-backed security crisis and economic downturn.
“With no end to the escalation in sight, affordability is rapidly deteriorating nationally and especially in some key markets such as Denver, Houston, Miami, and Washington,” CoreLogic president and CEO Frank Martell said in the report. “While the low mortgage rates are keeping the market affordable from a monthly-payment perspective, affordability will likely become a much bigger challenge in the years ahead until and when the industry resolves the housing supply challenge.”
Denver topped CoreLogic’s list of top U.S. metro areas for growth, logging a 8.7% change from this time last year. Las Vegas, San Diego, Los Angeles, and Boston rounded out the top five.
But Denver was also included in CoreLogic’s list of “overvalued” markets, along with the Houston, Miami, and Washington, D.C. metropolitan areas.
If some of those western cities sound familiar, it’s because as in previous months, home-price gains have loosely correlated with the top cities for Home Equity Conversion Mortgage growth: Denver and Las Vegas also topped Reverse Market Insight’s most recent list of reverse mortgage origination growth by city, turning in gains of 42.1% and 40.8%, respectively.
Written by Alex SpankoPrint Article