Home prices will rise by 4.7 percent on a year-over-year basis between February 2019 and February 2020, , according to the CoreLogic HPI Forecast. On a month-over-month basis, home prices are expected to decrease by 0.5 percent between February 2019 and March 2019.

The CoreLogic HPI Forecast is a projection of home prices calculated using the CoreLogic HPI and other economic indicators.

“During the first two months of the year, home-price growth continued to decelerate,” said 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 pickup in home-price growth later this year.”

Home prices across the U.S. increased 4 percent year over year compared with February 2018. On a month-over-month basis, prices increased by 0.7 percent in February 2019, according to the CoreLogic Home Price Index.

According to the CoreLogic Market Condition Indicators, an analysis of housing values in the country’s 100-largest metropolitan areas, based on housing stock, 35 percent of metropolitan areas have an overvalued housing market as of February 2019.

The Market Condition Indicators analysis categorizes home prices in individual markets as undervalued, at value or overvalued, by comparing home prices to their long-run, sustainable levels, which are supported by local market fundamentals, such as disposable income. Also, as of February 2019, 27 percent of the top-100 metropolitan areas were undervalued, and 38 percent were at value. When looking at only the top-50 markets based on housing stock, 40 percent were overvalued, 18 percent were undervalued, and 42 percent were at value in February 2019.

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The Market Condition Indicators analysis defines an overvalued housing market as one in which home prices are at least 10 percent above the long-term, sustainable level. An undervalued housing market is one in which home prices are at least 10 percent below the sustainable level.

In all, 62 percent of residents in high-priced markets acknowledged that housing in these markets was unaffordable, compared to only 11 percent of respondents across all markets surveyed last year. Almost 71 percent of renters in these high-priced markets felt their housing costs were unaffordable, compared with just 16 percent of renters across all markets in 2018.

High-priced markets were identified as the 15 metropolitan areas with the highest median home prices. The study focused on the dynamics of housing decision making and the impact that the housing market had on the attitudes and perceptions of residents in high-priced markets.

“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. The cost of either buying or renting in expensive markets puts a significant strain on most consumers,” said Frank Martell, president and CEO of CoreLogic. “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.”