For the fifth consecutive month, nationwide home prices increased more than 6 percent, according to the CoreLogic Home Price Index.
For the year, CoreLogic said the largest price gains were in California, Idaho, Nevada, Utah and Washington.
During December, home prices nationally increased year-over-year by 6.6 percent from December 2016 to December 2017, and on a month-over-month basis home prices increased by 0.5 percent in December 2017 compared with November 2017.
CoreLogic predicts home prices will increase by 4.3 percent by December 2018.
“The number of homes for sale has remained very low,” CoreLogic Chief Economist Frank Nothaft said in a release. “Job growth lowered the unemployment rate to 4.1 percent by year’s end, the lowest level in 17 years. Rising income and consumer confidence has increased the number of prospective homebuyers. The net result of rising demand and limited for-sale inventory is a continued appreciation in home prices.”
CoreLogic said 35 percent of metropolitan areas had an overvalued housing market in December 2017; 28 percent were undervalued; and 37 percent were at value.
“Home prices continue to rise as a result of aggressive monetary policy, the economic and jobs recovery and a lack of housing stock. The largest price gains during 2017 were in five Western states: California, Idaho, Nevada, Utah and Washington,” CoreLogic President and CEO Frank Martell said. “As home prices and the cost of originating loans rise, affordability continues to erode, making it more challenging for both first time buyers and moderate-income families to buy. At this point, we estimate that more than one-third of the 100 largest metropolitan areas are overvalued.”