Annual price growth shows first acceleration in more than a year

Home prices moved higher in April and picked up their pace for the first time in more than a year.

The annual rise in the CoreLogic HPI was 3.6% while the month-over-month gain was 1% after revised March figures. The rise in price growth was helped by an increase in buyer activity as mortgage rates eased.

“The pickup in sales between March and April, has helped to counter the recent slowing in annual home-price growth,” said Dr. Frank Nothaft, chief economist at CoreLogic. “Mortgage rates are 0.6 percentage points below what they were one year ago and incomes are up, which has improved affordability for buyers. However, price growth has remained the highest for lower-priced homes, constraining housing choices for first-time buyers.”

Although prices are expected to decline from April to May 2019, the CoreLogic HPI Forecast indicates a rise year-over-year of 4.7% through to April 2020.

The firm’s Market Condition Indicators show that 37% of the 100 largest metropolitan areas by housing stock have an overvalued housing market as of April 2019; 26% were undervalued, and 37% were at value.

Among only the top 50 markets, 42% were overvalued, 16% were undervalued and 42% were at value.

The MCI analysis defines an overvalued housing market as one in which home prices are at least 10% above the long-term, sustainable level. An undervalued housing market is one in which home prices are at least 10% below the sustainable level.

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