Home Price Index shows January prices gained just 0.1% from December
Home prices gained 4.4% in the 12-months to January 2019 but the rate of growth was the lowest since August 2012.
CoreLogic’s Home Price Index shows a 0.1% rise month-over-month from a revised December figure while the firm’s HPI Forecast is predicting a 0.9% decrease from January to February.
“The spike in mortgage interest rates last fall chilled buyer activity and led to a slowdown in home sales and price growth,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Fixed-rate mortgage rates have dropped 0.6 percentage points since November 2018 and today are lower than they were a year ago. With interest rates at this level, we expect a solid home-buying season this spring.”
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Most markets are at value
CoreLogic’s Market Condition Indicators which consider the 100 largest metros by housing stock, finds that 38% of markets were at value in January while 35% are overvalued and 27% are undervalued.
For the 50 largest metros by housing stock, 42% were at value, 40% overvalued, and 18% undervalued.
These assessments are based on markets’ long-run sustainable home prices supported by market fundamentals including disposable income. Overvalued means 10% above the long-run levels with undervalued markets 10% below the long-run levels.
“The slowing growth in home prices was inevitable in many respects as buyers pull back in the face of higher borrowing and ownership costs,” said Frank Martell, president and CEO of CoreLogic. “As we head into 2019, we can expect continued strong employment growth and rising incomes which could support a reacceleration in home-price appreciation later this year.”
