Home prices in the United States increased both month-over-month and year-over-year in December according to CoreLogic.
The monthly increase was just 0.1% while the 4.7% annual rise was the slowest pace since 2002. For the 12 months to December 2019, the firm forecasts an increase of 4.6%.
“Higher mortgage rates slowed home sales and price growth during the second half of 2018,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Annual price growth peaked in March and averaged 6.4% during the first six months of the year. In the second half of 2018, growth moderated to 5.2%. For 2019, we are forecasting an average annual price growth of 3.4%.”
1 in 3 of the largest metros is overvalued
Data from the CoreLogic Market Condition Indicators, which analyzes the 100 largest US metros by housing stock, reveals that 33% of markets are overvalued, 27% are undervalued, and 44% are at value.
“The slowdown in the rate of home price appreciation reflects the impact of inventory shortages and growing affordability issues in many markets,” said Frank Martell, president and CEO of CoreLogic. “On the positive side, if home-price growth continues to moderate, interest rates remain stable and household incomes rise in 2019, it could help renters and first-time buyers to take the plunge and realize the dream of owning a home.”