Home prices in the United States rose yet again last month, continuing a steady march that has some raising concerns about overheated housing markets in certain areas.
CoreLogic’s Home Price Index rose by 6.9% between April 2017 and April 2018, the real estate analytics firm reported Tuesday, with a 1.2% month-over-month gain from March. As in previous months, CoreLogic attributed the significant increase to a lack of available options on the market.
“The best antidote for rising home prices is additional supply,” CoreLogic chief economist Frank Nothaft said in a statement announcing the results. “New construction has failed to keep up with and meet new housing growth or replace existing inventory.”
Western homebuyers once again saw the most substantial uptick in home prices, with a 12.8% increase in Washington state from this time last year. Idaho followed with 12.4%, with Nevada and Utah close behind at 12.2% and 11.5%, respectively.
Booming levels of home prices and home equity have been a consistent theme in the industry over the last year to 18 months, with Western states in particular benefiting from the trends: In its most recent set of region-specific data, reverse mortgage data firm Reverse Market Insight reported year-over-year origination growth of 51.8% and 45.3% in Washington state and Oregon, respectively.
King County, Washington — of which Seattle is the county seat — also loved an impressive 41.6% in Home Equity Conversion Mortgage endorsement growth in the first quarter of 2018.
Still, ever-rising home prices aren’t always a positive: CoreLogic determined that 40% of the top 100 metro areas have “overvalued” housing markets, as determined by the relationship between home values and local income levels. Among the top 50 markets, a full 52% were overvalued, CoreLogic determined.
“Additionally, as of April 2018, 28% of the top 100 metropolitan areas were undervalued and 32% were at value,” CoreLogic observed.
Interestingly, the red-hot San Francisco Bay Area market was determined to be “at value,” while the Las Vegas, Denver, and Los Angeles marketplaces were considered “overvalued.”
Written by Alex Spanko