U.S. home prices are up both year over year and month over month, according to a report released today by global property information provider CoreLogic.
Home prices nationally increased year over year by 7 percent from November 2016 to November 2017, and on a month-over-month basis home prices increased by 1 percent in November 2017 compared with October 2017, according to the CoreLogic Home Price Index.
“Rising home prices are good news for home sellers, but add to the challenges that home buyers face,” Frank Nothaft, chief economist for CoreLogic, said in a statement. “Growing numbers of first-time buyers find limited for-sale inventory for lower-priced homes, leading to both higher rates of price growth for ‘starter’ homes and further erosion of affordability.”
According to CoreLogic Market Condition Indicators (MCI) data, an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock, 37 percent of metropolitan areas have an overvalued housing stock as of November 2017. After 6.7 percent growth between November 2016 and November 2017, the Boston market is rated “at value.” Massachusetts as a whole recorded a record high median sale price in November, according to analysis from The Warren Group, publisher of Banker & Tradesman.
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. Also, as of November, 36 percent of the top 100 metropolitan areas were undervalued and 26 percent were at value (this percent share is based on 99 markets for this report since data for Honolulu is currently unavailable). When looking at only the top 50 markets based on housing stock, 50 percent were overvalued, 14 percent were undervalued and 36 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.
