CoreLogic Reports April Home Prices Up 6.9%

CoreLogic released the CoreLogic Home Price Index (HPI™) and HPI Forecast™ for April 2018, which shows home prices rose both year over year and month over month. Home prices increased nationally by 6.9 percent year over year from April 2017 to April 2018. On a month-over-month basis, prices increased by 1.2 percent in April 2018 – compared with March 2018 – according to the CoreLogic HPI.

Looking ahead, the CoreLogic HPI Forecast indicates that the national home-price index is projected to continue to increase by 5.3 percent on a year-over-year basis from April 2018 to April 2019. On a month-over-month basis, home prices are expected to rise 0.2 percent in May 2018. The CoreLogic HPI Forecast is a projection of home prices that is calculated using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“The best antidote for rising home prices is additional supply,” said Dr. Frank Nothaft, chief economist for CoreLogic. “New construction has failed to keep up with and meet new housing growth or replace existing inventory. More construction of for-sale and rental housing will alleviate housing cost pressures.”

According to the CoreLogic Market Condition Indicators (MCI), an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock found that 40 percent of metropolitan areas have an overvalued housing market as of April 2018. The MCI analysis categorizes home prices in individual markets as undervalued, at value or overvalued, by comparing home prices to their long-run, sustainable levels, which are supported by local market fundamentals (such as disposable income). Additionally, as of April 2018, 28 percent of the top 100 metropolitan areas were undervalued and 32 percent were at value. When looking at only the top 50 markets based on housing stock, 52 percent were overvalued, 14 percent were undervalued and 34 percent were at value. The MCI analysis defines an overvalued housing market as one in which home prices are at least 10 percent higher than the long-term, sustainable level, while an undervalued housing market is one in which home prices are at least 10 percent below the sustainable level.