Photo: Robert Clark
Home prices were up in all 50 states in April and are expected to continue to rise.
And with prices on the rise, over a third of the top US housing markets are currently overvalued, according to a newly released report by CoreLogic.
Over the last year, national home prices rose by 6.9 percent in April, and 1.2 percent on a monthly basis.
Washington State recorded the greatest home price appreciation in April, with home prices rising 12.8 percent annually. On the other end of the spectrum, Louisiana recorded the smallest gains at 1.3 percent annual price growth in April.
Home prices were up 5.6 percent year-over-year in New York State in April.
At the city-level, Las Vegas, NV and San Francisco, CA both recorded the largest annual gains, with home prices up 12.3 percent from last year in April.
CoreLogic predicts that national home prices will continue to rise by 5.3 percent over the next year.
In a separate report, Realtor.com says that home prices have risen so high in the state of California, that many residents have reached their breaking point and are searching for homes in other counties and in other states.
The best remedy for the increasing upward pressure on home prices is the very thing causing the pressure — supply.New construction is failing to keep up with and meet new housing growth, and more construction of for-sale homes and rental housing would alleviate housing cost pressures.
“The acute shortage of for-sale inventory translates into higher home prices. While that’s good for current homeowners because it generates home-equity wealth, it erodes affordability and makes it more challenging for home buyers to afford to buy,” Dr. Frank Nothaft, chief economist for CoreLogic, tells BuzzBuzzNews.
This particularly affects millennials as they are primarily today’s first-time buyers. Prices for entry-level homes have appreciated even more rapidly than for higher-priced homes, Nothaft adds.
Only one third of the top 50 housing markets were considered to be “at value” in April. However, 40 percent of the top 100 housings were “overvalued” and 52 percent of the top 50 markets were “overvalued” in April.
An overvalued housing market is one in which home prices are at least 10 percent higher than the long-term, sustainable level, while an undervalued housing market is one in which home prices are at least 10 percent below the sustainable level.
Click here to read the entire release.