Tight housing inventory continues to be an enemy to homebuyers as supply constraints keep putting upward pressure on home prices, which are now above where they were 12 years ago.
House values grew 7% year-over-year in March, and 1.4% on a monthly basis from February, according to CoreLogic’s Home Price Index.
“Home prices grew briskly in the first quarter of 2018,” said Frank Nothaft, chief economist for CoreLogic, in a press release. “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.”
About 37% of the nation’s 100 largest metropolitan areas based on housing stock were overvalued as of March, with 28% being undervalued. Of the top 50 markets, 50% were overvalued and only 14% were undervalued.
Las Vegas and San Francisco were among cities seeing the greatest gains in house values annually in March, with home prices rising 12.6% and 10.8%, respectively.
“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,” said Frank Martell, president and CEO of CoreLogic.
“Now, the CoreLogic Market Condition Indicators show half of the top 50 markets in the country are overvalued because home prices in those areas have risen so much faster than incomes,” he said.
All 50 states and the District of Columbia also saw home values rise in March, with Idaho and Washington tied for the top spot in home price appreciation. Both states saw house values grow 12.6%.
Home prices are expected to appreciate another 5.2% from March 2018 to March 2019, according to CoreLogic estimates.