Photo: Robert Clark
As spring homebuying season sprung, high demand and limited supply pushed US home prices up in all 50 states in March.
And with new construction levels remaining well below historic levels, upward pressure is likely to remain on home prices for the foreseeable future, according to a report released today by CoreLogic.
Tight inventory and fierce competition have American homebuyers bracing for one of the most competitive spring homebuying seasons in years.
National home prices rose 7 percent year-over-year in March, while on a month-over-month basis, prices grew by 1.4 percent.
Nevada and Washington State recorded the largest year-over-year gains, with home prices in both states rising 12.6 percent in March. And, Wyoming recorded the smallest increase with 0.4 percent annual price growth.
“Home prices grew briskly in the first quarter of 2018. High demand and limited supply have pushed home prices above where they were in early 2006. New construction still lags historically normal levels, keeping upward pressure on prices,” Dr. Frank Nothaft, chief economist for CoreLogic, says in the digital release.
Some 37 percent of metros having an “overvalued” housing market (based off of the 100 largest metros), while housing stock in 50 percent of the top 50 metros are “overvalued.”
Comparatively, in the top 100 and top 50 markets 35 percent and 36 percent, respectively, are deemed to be overvalued.
The New York City metro area — whose housing market is characterized as “overvalued” — saw home prices climb 5.8 percent from last year in March. And the San Francisco metro area, arguably one of the country’s hottest housing markets, is currently “at value” and saw home prices jump 10.8 percent annually in March.
CoreLogic’s Market Conditions Indicators (MCI) categorizes home prices in individual markets as undervalued, at value or overvalued, by “comparing home prices to their long-run, sustainable levels, which are supported by local market fundamentals (such as disposable income).”
Meantime, over the next year, CoreLogic predicts prices will grow by 5.2 percent.
“Affordability continues to slip away from the average buyer. Lower-priced homes are appreciating much faster than higher-priced properties, making the affordability crisis even worse,” Frank Martell, president and CEO of CoreLogic, says in the digital release.
Click here to read the entire release.