Home prices were up 4.4 percent year-to-year in January across the nation.
Every state, with the exception of Louisiana and North Dakota, saw year-to-year increases. According to CoreLogic’s latest Home Price Index report, home prices were also up 0.1 percent from December 2018 to January 2019. The report predicts home prices will rise 4.6 percent from January 2019 to January 2020, but decrease 0.9 percent for February 2019’s report.
“The spike in mortgage interest rates last fall chilled buyer activity and led to a slowdown in home sales and price growth,” says Dr. Frank Nothaft, chief economist for CoreLogic, said. “Fixed-rate mortgage rates have dropped 0.6 percentage points since November 2018 and today are lower than they were a year ago. With interest rates at this level, we expect a solid home-buying season this spring.”
In the 100 largest metros in the country, 35 percent had home prices that were 10 percent or more higher than a sustainable trend, or overvalued. Thirty-eight percent of metros are at value and 27 percent had home prices that were 10 percent or more lower than a sustainable trend. In Pennsylvania, most metros continue to be undervalued or at value, with just the Bloomsberg/Berwick area and State College being overvalued.
“The slowing growth in home prices was inevitable in many respects, as buyers pull back in the face of higher borrowing and ownership costs,” says Frank Martell, president and CEO of CoreLogic. “As we head into 2019, we can expect continued strong employment growth and rising incomes, which could support a reacceleration in home price appreciation later this year.”