According to the CoreLogic Home Price Index (HPI), home prices increased significantly both month-over-month and year-over-year in July. The study analyzed listing prices for a comprehensive set of single-family attached and detached homes in gathering its findings.
Nationally, the average cost of a single-family house increased nearly 0.9 percent from this time last month and a whopping 6.7 percent from this time last year.
For the Chicago-Naperville-Arlington Heights area, home prices rose an average of 3.6 percent year-over-year and 0.5 percent from June.
The CoreLogic HPI Forecast suggests this trend will continue, leading to another 5 percent national gain in home prices year-over-year by July 2018.
“Home prices in July continued to rise at a solid pace with no signs of slowing down,” CoreLogic CEO Frank Martell said. “The combination of steadily rising purchase demand along with very tight inventory of unsold homes should keep upward pressure on home prices for the remainder of this year. While mortgage interest rates remain low, affordability cracks are emerging as over a third of U.S. top cities are now overvalued.”
In fact, out of the United States’ 100 largest cities, 34 percent are now considered to have an overvalued housing stock, CoreLogic reports. This would suggest that home prices in over a third of U.S. metros are at least 10 percent higher than the recommended, sustainable level. In comparison, just 28 percent of the same 100 cities were undervalued and 38 were at value.