Home prices during May were up 1.1 percent from April and up 7.1 percent from May 2017, according to new data from CoreLogic
Four states recorded double-digit annualized price gains in May: Washington (12.8 percent), Nevada (12.4 percent), Idaho (11.2 percent) and Utah (10.9 percent). Connecticut had the weakest year-over-year price gains with a 0.6 percent rise. CoreLogic also determined that 40 percent of the nation’s 100 largest metro areas were overvalued in May, while 34 percent were at value and 26 percent were undervalued.
Looking ahead, CoreLogic
forecasted a 5.1 percent year-over-year increase in home prices from May 2018 to May 2019 and a 0.3 percent month-over-month uptick into June 2018.
“The lean supply of homes for sale is leading to higher sales prices and fewer days on market, and the supply shortage is more acute for entry-level homes,” said Dr. Frank Nothaft, Chief Economist for CoreLogic. “During the first quarter, we found that about 50 percent of all existing homeowners had a mortgage rate of 3.75 percent or less. May’s mortgage rates averaged a seven-year high of 4.6 percent, with an increasing number of homeowners keeping the low-rate loans they currently have, rather than sell and buy another home that would carry a higher interest rate.”
In separate research conducted with RTi Research of Norwalk, Conn., CoreLogic found 15 percent of homeowners and 28 percent of renters have indicated a desire to buy a home in the next 12 months, while only 11 percent of sellers indicated plans to list their properties. sell. a desire to sell. The company warned that this imbalance will continue to create new highs in home prices.
“The CoreLogic consumer research demonstrates that, despite high home prices, renters want to get out of their rental property and purchase a home,” said Frank Martell, President and CEO of CoreLogic. “Even in the most expensive markets, we found four times as many renters looking to buy than homeowners willing to sell. Until more supply becomes available, we will continue to see soaring prices in cities such as Denver, San Francisco and Seattle.”