Home prices increased during June. However, CoreLogic’s Home Price Index (HPI) also found that homes in four of the country’s top 10 markets are overvalued, and housing inventory nationwide was the lowest in more than three decades in June.
The HPI found that June home prices increased 6.7 percent compared with June 2016. Prices increased 1.1 percent compared with May 2017. CoreLogic predicts home prices will increase 5.2 percent through June 2018.
“The growth in sales is slowing down, and this is not due to lack of affordability, but rather a lack of inventory,” CoreLogic Chief Economist Frank Nothaft said in a release. “As of Q2 2017, the unsold inventory as a share of all households is 1.9 percent, which is the lowest Q2 reading in over 30 years.”
CoreLogic found that home prices in Denver, Houston, Miami and Washington, D.C. were overvalued, at least 10 percent higher than the long-term, sustainable level.
“Home prices are marching ever higher, up almost 50 percent 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,” CoreLogic CEO Frank Martell said. “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.”