CoreLogic: Static Interest Rates Contribute to Rising Home Prices

For the third year running, Maricopa County is the fastest growing county in the U.S. For those of you who are not residents (yet), Maricopa County is commonly referred to as “The Valley of the Sun”. It is essentially Central Arizona and encompasses some of the most recognizable cities in the state: Phoenix for one, Tempe (home of ASU), Glendale in the West Valley (home of the Arizona Cardinals), Scottsdale (needs no explanation), Mesa, Chandler and Gilbert (wildly popular and rapidly growing East Valley communities), and includes Arizona’s largest airport, Sky Harbor International, locally dubbed America’s Friendliest Airport. In short, if you’ve been to Arizona you’ve likely been to Maricopa County.

According to AZCentral, Maricopa County added 81,244 people between July 2017 and July 2018. That’s up from 74,000 people during that same time period the year before. Maricopa County’s growth helped it maintain its rank as the fourth most populous county in the country with 4,410,824 residents.

Home Buyers in the Phoenix area are finding the going tough. Inventory has picked up noticeably since the beginning of 2019 but is still far below demand. As a result, Arizona home prices are on a steady rise of 5 to 7 percent. Three regions in Phoenix among AZCentral’s neighborhoods to watch due to higher than normal price increases are: South Phoenix, West Phoenix, and the pricier Arcadia neighborhood.

CoreLogic: Home Prices Rise 4 Percent Nationwide

By RISMedia Staff

Home prices rose 4 percent year-over-year, with an 0.7 percent change from January, according to CoreLogic’s latest Home Price Index (HPI™) report. Additionally, the average home price is projected to rise 4.7 percent this year.

“During the first two months of the year, home-price growth continued to decelerate,” says Dr. Frank Nothaft, chief economist for CoreLogic. “This is the opposite of what we saw the last two years when price growth accelerated early. With the Federal Reserve’s announcement to keep short-term interest rates where they are for the rest of the year, we expect mortgage rates to remain low and be a boost for the spring buying season. A strong buying season could lead to a pick-up in home-price growth later this year.”

Thirty-five percent of the 100 largest markets are overvalued, a condition CoreLogic defines as when “home prices are at least 10 percent higher than the long-term, sustainable” trend, according to the report; 38 percent were at value; and 27 percent were undervalued (“at least 10 percent below the long-term, sustainable” trend).

“About 40 percent of the top 50 largest metropolitan areas in the country are now categorized as overvalued, and we expect that percentage to grow over the remainder of 2019,” says Frank Martell, president and CEO of CoreLogic. “The cost of either buying or renting in expensive markets puts a significant strain on most consumers. Our research tells us that about 74 percent of millennials, the single largest cohort of homebuyers, now report having to cut back on other categories of spending to afford their housing costs.”