It should be no surprise to agents today that for many clients, the purchase of a home is becoming increasingly difficult financially.
As prices continue to soar as incomes stagnate, the American Dream is slipping out of reach of many of our clients. Mortgage rates at historic lows can’t stop the trend.
According to a CNBC report, CoreLogic data indicates that at the end of July, of the top 50 markets, based on housing stock, 46 percent were overvalued. A market is considered overvalued when home prices are at least 10 percent higher than the long-term, sustainable level.
Corelogic did find that 16 percent of markets in the report were listed as undervalued and 38 percent came in fairly valued.
Moreover, home prices came in 6.7 percent higher in July, compared with the same month a year ago, according to the National Association of Realtors.
Frank Martell, president and CEO of CoreLogic, said the trend of increasing home prices shows no signs of slowing down.
“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.”
Frank Nothaft, chief economist at CoreLogic, said price appreciation has been particularly strong in the Pacific Northwest and in Denver.
“The sharp increase in prices in Washington and Utah has been especially striking, with home price growth in both states accelerating by 3 percentage points since the beginning of this year.”
Nela Richardson, chief economist at Redfin, noted that buyer demand continues to increase, with 35 percent more requests for home tours in July over the same period in 2016.
“Buyer demand has been stronger so far in 2017 than last year, but the combination of low inventory and rising home prices is taking its toll heading into the fall. Sellers are still in control of the market, but their advantage is narrowing as buyers are becoming less willing or able to chase escalating prices.”