Sales growth slows in June

Affordability is “rapidly deteriorating” as prices surge, says CoreLogic CEO

By Francis Monfort

03 Aug 2017

Home prices rose in June from prices last month and a year ago, according to CoreLogic’s Home Price Index. Prices rose 6.7% on a year-over-year basis, while the month-over-month growth was at 1.1% based on revised May data.

“The growth in sales is slowing down, and this is not due to lack of affordability, but rather a lack of inventory,” said Frank Nothaft, chief economist for CoreLogic. “As of Q2 2017, the unsold inventory as a share of all households is 1.9%, which is the lowest Q2 reading in over 30 years.”

Looking ahead, CoreLogic said that its forecast indicates an increase in home prices of 5.2% on annual basis from June 2017 to June 2018. CoreLogic expects the increase to be 0.6% on a month-over-month basis from June to July. The company’s home-price projections are based on its Home Price Index and other economic variables.

In June, four of the 10 largest metropolitan areas in the nation in terms of population were overvalued, CoreLogic said. Denver-Aurora-Lakewood, Colo., Houston-The Woodlands-Sugar Land, Texas, Miami-Miami Beach-Kendall, Fla., and Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.V., saw affordability of home prices decrease during the month.

“Home prices are marching ever higher, up almost 50% since the trough in March 2011. With no end to the escalation in sight, affordability is rapidly deteriorating nationally and especially in some key markets such as Denver, Houston, Miami and Washington,” said Frank Martell, president and CEO of CoreLogic. “While low mortgage rates are keeping the market affordable from a monthly payment perspective, affordability will likely become a much bigger challenge in the years ahead until the industry resolves the housing supply challenge.”

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Home prices up almost 7% in April CoreLogic says
Low chance of housing-price declines keeps unaffordability a concern