A supply-and-demand imbalance across the U.S. pushed home prices up 7% year-over-year in March, their highest level since early 2006, according to a CoreLogic report Tuesday.
Home prices in March also trended upward on a monthly basis, rising 1.4% from February, according to CoreLogic, a California-based global property information provider.
“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,” said Frank Nothaft, chief economist at CoreLogic, in the report.
All 50 states registered positive price growth in March. Washington and Nevada led the nation, each registering a 12.6% annual increase.
At a metro level, Las Vegas saw the largest price spike, at 12.6%, followed by San Francisco (10.8%) and Denver (8.9%), according to the report.
Half of the Top-50 Housing Markets Considered “Overvalued”
The fast home price appreciation made the American dream of homeownership less achievable, especially for most first-time buyers, said Frank Martell, president and CEO of CoreLogic, in the report.
“Lower-priced homes are appreciating much faster than higher-priced properties, making the affordability crisis progressively worse,” he said.
When looking at the top-50 markets based on housing stock, CoreLogic found that half were “overvalued,” meaning home prices in those markets are at least 10% higher than the long-term, sustainable level defined by such fundamentals as income, employment as well as cost of living.
Additionally, 36% of the top 50 markets were “at value” in March (meaning home price appreciation is in line with income growth), while 14% were “undervalued” (meaning the price is 10% lower than the long-term, sustainable level), according to the report.
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