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The rate of annual home price appreciation sped up for the first time in over a year during April, affecting affordability at the low end of the market, according to CoreLogic.
Home prices increased nationally by 3.6% over April 2018 and by 1% over a revised result for March; CoreLogic incorporates newly released public data and updates its findings each month.
Over the next 12 months, CoreLogic expects home prices will increase by 4.7%. But on a shorter-term basis, prices should drop by 0.3% between April and May.
The last time the annual rate of appreciation increased between months was in March 2018.
“The pickup in sales between March and April, has helped to counter the recent slowing in annual home-price growth,” Frank Nothaft, chief economist at CoreLogic, said in a press release. “Mortgage rates are 0.6 percentage points below what they were one year ago and incomes are up, which has improved affordability for buyers. However, price growth has remained the highest for lower-priced homes, constraining housing choices for first-time buyers.”
Approximately 40% of respondents to a first-quarter CoreLogic survey said they could not buy a home in their preferred location, while one-third said they had to buy a smaller home than they wanted.
“According to our consumer research, buyers feel that high prices are forcing them to spend more than they’d expect on a home,” said Frank Martell, president and CEO of CoreLogic. “As many as one-third of buyers admit they put down a higher down payment as well.”
When it comes to the largest 100 metropolitan statistical areas in the nation, 37% were overvalued in April, while 26% were undervalued and 37% were at value.
But by cutting that list to the largest 50 MSAs, 42% were overvalued and just 16% were undervalued.
Only two states recorded annual price depreciation: North Dakota, down 5%, and Connecticut, down 0.3%.
Idaho was the only state with double-digit annual price growth, up 10.3%.