Fueled by tight inventories and attractive mortgage rates, the average price for U.S. homes was 7.1 percent higher in March than it was a year earlier, according to CoreLogic’s Home Price Index (HPI).
The HPI also found that average prices in March were slightly higher (1.6 percent) than they were in February, and it forecasts average prices for homes will increase by nearly 5 percent by March 2018.
“Home prices posted strong gains in March 2017, and the CoreLogic Home Price Index is only 2.8 percent from its 2006 peak,” CoreLogic Chief Economist Frank Nothaft said in a release. “With a forecasted increase of almost 5 percent over the next 12 months, the index is expected to reach the previous peak during the second half of this year.
“Prices in more than half the country have already surpassed their previous peaks, and almost 20 percent of metropolitan areas are now at their price peaks. Nationally, price growth has gradually accelerated over the past half-year, while rent growth for single-family rental homes has slowly decelerated over the same period,” Nothaft added.
Ninety-percent of the metropolitan areas the HPI measured saw increases in average home prices during March, and four of the largest markets now are overvalued.
A potent mix of strong job gains, household formation, population growth and still-attractive mortgage rates in the face of tight inventories are fueling a continuing surge in home prices across the U.S.,” CoreLogic CEO Frank Martell said. “Geographically, gains were strongest in the West with Washington showing the highest appreciation at almost 13 percent, and Seattle, Tacoma and Bellingham posting gains of 13 to 14 percent.
Other metropolitan areas that saw significant increases in the average home prices during March were Denver (9.9 percent); Chicago, Las Vegas and Los Angeles (6.4 percent); Washington, D.C. (5.5 percent); Boston (5.1 percent) and Miami (5 percent).