Costly markets 'move to frigid waters,' price growth to warm in 2020
Home price appreciation remained modest as affordability and tight inventory kept demand down, though prices are expected to accelerate in 2020, according to CoreLogic.
Annual home price growth increased 3.7% in March, but only 1% month-over-month. CoreLogic anticipates values to rev up to 4.8% year-over-year in March 2020, but decrease 0.3% into this April, continuing the early-year fluctuation.
"The U.S. housing market continues to cool, primarily due to some of our priciest markets moving into frigid waters," Ralph McLaughlin, deputy chief economist at CoreLogic, said in a press release. "But the broader market looks more temperate as supply and demand come into balance. With mortgage rates flat and inventory picking up, we expect more buyers to take advantage of easing housing market headwinds."
About 35% of metro areas were overvalued in March, compared to 39% at value and 26% undervalue, according to CoreLogic's Market Condition Indicators. The Las Vegas housing market led with an 8% year-over-year rise in prices, followed by Denver at 4.1% and Houston at 3.5%. At the state level, Idaho had March's largest annual change at 10.5%, with Maine's 9.1% in second and Utah's 7.8% in third.
"The cost of either buying or renting in expensive markets puts a significant strain on most consumers," said Frank Martell, president and CEO of CoreLogic. "Nearly half of survey respondents — 44% of renters — cited the cost to rent in high-priced housing markets as the No. 1 barrier to entry into homeownership. This is potentially forcing renters to wait longer to have the necessary down payment in these communities."