National home prices for September 2017 were up 7%, compared with the same time last year, and rose by 0.9% from August 2017, driven by low for-sale inventory and a strengthening economy.
In addition, 36% of cities have overvalued housing stock as of September, according to the most recent data from Irvine, California-based real-estate research firm CoreLogic.
“Heading into the fall, home price growth continues to grow at a brisk pace,” said CoreLogic Chief Economist Frank Nothaft in a release. “This appreciation reflects the low for-sale inventory that is holding back sales and pushing up prices.”
Home prices will rise by 4.7% from September 2017 to September 2018, CoreLogic’s Home Price Index (HPI) Forecast projected. On a month-over-month basis, however, home prices are expected to decline by 0.1% from September to October. The forecast uses the HPI and other economic variables for the projection, with values derived from state-level forecasts.
Utah and Oregon were the only states to see double-digit percentage growth in HPI for September on a year-over-year basis, at 10.5% and 12.5%, respectively. West Virginia, by contrast, was the only state to see a home price decline for September year-over-year; its HPI declined by 0.3%.
Low mortgage interest rates and a strengthening economy are supporting the ongoing strong demand for residential real estate, CoreLogic President and CEO Frank Martell said in the report. But he sounded a note of caution about overvalued markets.
Las Vegas, Denver, Los Angeles, Boston, and San Francisco were the top five metropolitan areas for growth for September, but Las Vegas, Denver and Los Angeles were all listed as being overvalued. Those three cities saw HPI changes year over year for single-family homes of 9.7%, 8.4% and 7.1%, respectively.
“While demand and home price growth is in a sweet spot, a third of metropolitan markets are overvalued and this will become more of an issue if prices continue to rise next year as we anticipate,” Martell said in the report.
Written by Maggie Flynn