Home prices in the United States increased nationally by 6.9% in the 12 months to April 2018 and 1.2% month on month, according to the latest index.
Values were up in all 50 states covered by the CoreLogic data and the firm projects that prices will increase by 5.3% in the 12 months to April 2019 and by 0.2% in the month of May.
It is a lack of supply that is keeping prices high, according to Frank Nothaft, chief economist at 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,’ he said.
According to CoreLogic’s analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock, some 40% of metropolitan areas have an overvalued housing market as of April 2018.
Additionally, as of April 2018 some 28% of the top 100 metropolitan areas were undervalued and 32% were at value. When looking at only the top 50 markets based on housing stock, 52% were overvalued, 14% were undervalued and 34% were at value.
The analysis defines an overvalued housing market as one in which home prices are at least 10% higher than the long term, sustainable level, while an undervalued housing market is one in which home prices are at least 10% below the sustainable level.
CoreLogic has also issued its 2018 storm surge report detailing the potential impact of the 2018 Hurricane season from June to November on the US mainland and territories. In the report, Florida was identified as the most vulnerable state in the nation with 2.7 million homes at risk.
$552 billion was the projected total cost to rebuild homes across the state if the maximum number of homes were impacted by a storm. Despite the potential impact, Florida home prices increased by 0.6% month on month, and 5.8% year on year. Home prices in the state are projected to continue to increase by 0.8% on a monthly basis and 7.5% on an annual basis
Florida continues to show price resiliency after Hurricane Irma in 2017. Despite the impact of the hurricane, prices were up 5.8% across the state compared to a year ago,’ said Frank Martell, CoreLogic president.
‘CoreLogic data projects continued gains to home prices in Florida for the remainder of 2018. However, gains could be erased if a significant storm makes landfall again,’ he added.
