Home prices continue to increase throughout the nation for the 52nd consecutive month, according to CoreLogic’s monthly Home Price Index report — but some notable metros might have overvalued markets

  • Including distressed sales, single-family home prices nationwide increased 1.3 percent from April to May and a 5.9 percent game year-over-year.
  • CoreLogic forecasts US home prices to jump another 0.8 percent in June and 5.3 percent by May of next year.
  • The Houston metro is forecasted to grow only 1.2 percent by May of next year.

Home prices continue to increase throughout the nation for the 52nd consecutive month, according to CoreLogic’s monthly Home Price Index report — but some notable metros might have overvalued markets.

Including distressed sales, single-family home prices nationwide increased 1.3 percent from April to May, CoreLogic says, which came out to a 5.9 percent gain year-over-year. The real estate data firm forecasts home prices to jump another 0.8 percent in June and 5.3 percent by May of next year.

Screen Shot 2016-07-08 at 3.03.07 AM

“Housing remained an oasis of stability in May, with home prices rising year-over-year between 5 percent and 6 percent for 22 consecutive months,” Chief Economist for CoreLogic Dr. Frank Nothaft said in a statement. “The consistently solid growth in home prices has been driven by the highest resale activity in nine years and a still-tight housing inventory.”

Although the HPI continues to move up year-over-year each month, it remains 7.2 percent below the peak values of April 2006. However, CoreLogic expects single-family home prices to reach a new peak by September 2017.

While markets around the country are experiencing healthy rebounds, CoreLogic points that many of them could be overvalued. Comparing the distance between a market’s long-term fundamental value and HPI, CoreLogic defined a current HPI of 10 percent above or below the long-term fundamental value for that market as undervalued or overvalued.

Notable overvalued markets include Denver, Houston, Los Angeles, Miami and Washington D.C., while Chicago and San Francisco were considered in normal market conditions.

Screen Shot 2016-07-08 at 3.19.27 AM

 

The Houston-The Woodlands-Sugarland area was considered an overvalued market by CoreLogic, only trailing Boston of the metros studied in lowest month-over-month HPI growth and having the third lowest increases year-over-year. And things aren’t expected to get better: the HPI in the Houston metro is forecasted to grow only 1.2 percent by May of next year.

Texas as a whole enjoyed a healthy May, with 1.4 percent growth over April and 7 percent growth year-over-year. However, the HPI increases are expected to slow going forward, with forecasts of only 2.7 percent growth by May of next year.

CoreLogic’s home price index uses public record as well as servicing and securities real estate databases and incorporates more than 40 years of sales transactions to analyze trends. Its home price index forecasts are based on a two-stage model that combines the equilibrium home price (as a function of real, disposable income per capita) with short-run fluctuations caused by market changes and other economic “shocks” — shifts in the unemployment rate, for example.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×