According to CoreLogic, most areas in the US show balance between price gains, cap rate drops and net revenue increases.

What Affects Cap Rates?

With home prices skyrocketing +20% this past year, according to the CoreLogic national Home Price Index, and rents on single-family homes jumping up +13%, according to CoreLogic’s Single-Family Rent Index, are homes overvalued?

Price growth that outpaces rent gains over a long period of time may signal that a property is overvalued if the property’s cap (capitalization) rate has remained constant.  (A cap rate is measured by dividing a property’s net operating income (NOI) from its property asset value.)


Please choose one answer:

1) I am ready to join EXP Realty. 

2) I am interested in EXP Realty and need more info. 

3) I am not interested in EXP Realty. 


* If you answered “#1” congratulations. You are about to join the fastest-growing real estate company in the world. Tim and Julie Harris are inviting you to join them at EXP Realty. Text Tim directly for the next steps: 512-758-0206. (text only please)

* If you answered “#2” please watch the videos and check out the other intel on this site. . 

* If you answered ‘#3’ no worries. You will want to check out so you can at least know what EXP Realty is and why so many agents are moving to EXP. 

Factors that affect cap rates include long-term interest rates, the riskiness of real estate investment and tax code changes.  The factor that has changed the most over the past two decades is long-term interest rates.  As a result, cap rates for single-family rental homes dropped by nearly -20% over the last decade and by almost -50% over the last two decades.

Cap Rates Down -20% over Last Decade

Both single-family and multifamily rental units have seen cap rates fall about -20% over the last decade.

When using rent increases adjusted for inflation in lieu of net operating income growth, it appears that single-family home prices in most US metros were anchored in economic fundamentals.

CoreLogic data indicates that most metros had price growth consistent with cap rate and net operating income changes.  Take a look:

Metro Areas                Ratio: 20-year HPI Growth to Expected Growth

Los Angeles                                            1.6

Seattle                                                   1.5

Anaheim, Austin, Jacksonville,

New York, Phoenix, San Diego,                1.3

Washington                                            1.3

Houston, Raleigh                                    1.2

Virginia Beach                                        1.1

Nassau-Suffolk, Warren                           1.0

Bridgeport                                              0.8

Los Angeles and Seattle, according to CoreLogic, may be outliers here.  These two metros have seen price gains over the last 20 years that may have exceeded what was expected given the decline in cap rates and changes in net rental income.


  • Most metro areas in the US have seen price growth exceed rent gains.
  • Price gains exceeding rent growth may indicate overvaluation if cap rates remain the same.
  • Cap rates are nearly -20% lower than they were 10 years ago and almost -50% lower than they were 20 years ago.
  • CoreLogic believes that price gains are generally consistent with estimates of net revenue increases and cap rate drops in most places within the US.

URGENT: Are You Worried About Having A Slower Start To The Year? Don’t Hit The Panic Button, Learn How To Have Massive Success In A Shifting Market. When You Attend This Exclusive Training You Will Learn 17 Surprising Secrets Of The Top 100 $ Millionaire Agents. Claim Your FREE Spot Now. After You Have Attended This Event You Will Experience A Huge Feeling Of Relief Knowing You Will FINALLY Laugh At Your Money Worries – You Will Have Your Own Personalized 2022 Step-By-Step Business And Lead Generation Plan. Learn Now How To Generate 100’s of Motivated Leads for FREE, Without Coming Off As A Pushy Salesperson and Losing Your Soul. You Will Soon Know How To Become One of the 1000s of Agents Making HUGE Money In This Changing Market. Claim your FREE spot now. YES, I Want To Attend The FREE Webinar! <——Click To Register

P.S. Free Webinar, Limited Space. Less Than 300 Spots Still Available. 

Thanks to CoreLogic.

Claim Your FREE Real Estate Treasure Map!