CoreLogic has released the CoreLogic Home Price Index and HPI Forecast for August 2018, which shows home prices rose both year over year and month over month. Home prices increased nationally by 5.5 percent year over year from August 2017. On a month-over-month basis, prices increased by 0.1 percent in August 2018.

Looking ahead, the CoreLogic HPI Forecast indicates that the national home-price index is projected to continue to increase by 4.7 percent on a year-over-year basis from August 2018 to August 2019. On a month-over-month basis, home prices are expected to decrease by 0.4 percent from August to September 2018. The CoreLogic HPI Forecast is a projection of home prices calculated using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices, according to the number of owner-occupied households for each state.

“The rise in mortgage rates this summer to their highest level in seven years has made it more difficult for potential buyers to afford a home,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The slackening in demand is reflected in the slowing of national appreciation, as illustrated in the CoreLogic Home Price Index. National appreciation in August was the slowest in nearly two years, and we expect appreciation to slow further in the coming year.”

According to the CoreLogic Market Condition Indicators, an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock, 38 percent of metropolitan areas have an overvalued housing market as of August 2018. The MCI 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 August 2018, 18 percent of the top 100 metropolitan areas were undervalued, and 44 percent were at value. When looking at only the top 50 markets based on housing stock, 46 percent were overvalued, 12 percent were undervalued and 42 percent were at value. The MCI analysis defines an overvalued housing market as one in which home prices are at least 10 percent higher than 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 2018, CoreLogic together with RTi Research of Norwalk, Conn., conducted an extensive consumer housing sentiment study, combining consumer and property insights. The study assessed attitudes toward homeownership and the drivers of the home buying or renting decision process. August data indicates that, while home prices are cooling, they are still rising in most markets. Home sales are down in some metros, in part because sellers believe prices will continue to rise and that by waiting, they can sell their homes for a better price.

Many intend to use proceeds from the sale of their current home to fund the downpayment of their next home. Fully 66 percent of homeowners who are considering buying in the next 10 years will need to sell their current homes to finance their next one. Meanwhile, 35 percent of recent homebuyers said they used funds from the sale of their previous home to finance the down-payment of their current home.

“In some markets, homebuyers and sellers are remaining cautious and taking a pause as price appreciation continues to rise,” said Frank Martell, president and CEO of CoreLogic. “By waiting to sell, homeowners believe they will get the greatest return on their investment; the more money they have for a down-payment, the easier the purchase payments will be for their next home.”

By Sam Evans

Millennials view owning a home as a greater accomplishment than saving the world, which ranked second to last, according to the 2018 TMS Millennial First-Time Homebuyer Study, notes a new survey from The Mortgage finance Company.

The study uncovered that 43% of Millennials said that owning a home is the most important accomplishment, with falling in love and saving $20,000 as second and third most important. According to the results, love and savings are inextricably linked – they need to fall in love in order to afford a new home. Saving the world barely beat buying a car, which ranked second to last with 13%.

[caption id="attachment_6376" align="alignleft" width="150"] Millennials consider buying a home the top accomplishment.[/caption]

“Millennials are three times more likely to buy a home than they are to save the world,” said Barbara Yolles, chief strategy officer for The Money Source (TMS). “Home represents ultimate happiness and achievement to these first timers.”

Yolles continued to compare the values of the Avengers to the values of Millennials. “It’s almost ironic,” Yolles wittingly said. “Millennials identify with the Avengers as their heroes who do good in the world and expect this from their brands. Yet, when it comes to home, they rank it over saving the world, which doesn’t bode well for the fate of the earth in the hands of this generation.”

The study also showed that Millennials compare the feeling of finding a new home to a treasure hunt, but inversely view the mortgage process to mountain climbing--something difficult and challenging to achieve.

The Federal Reserve has lifted its Supervisory Agreement with Flagstar Bancorp. The Supervisory Agreement, which began on Jan. 27, 2010, included requirements to submit a capital plan annually and receive a written non-objection from the Fed before paying a dividend or repurchasing stock, incurring or renewing holding company debt or engaging in affiliate transactions.

"This is a major milestone for our company, representing the last major regulatory issue with the old Flagstar," said Alessandro P. DiNello, president and chief executive officer. "This action reflects our successfu

l effort in building a strong financial institution that can deliver solid results within the framework of a strong risk and compliance structure. The lifting of the agreement ushers in a new era for our holding company, providing more flexibility in entering into strategic transactions.

"It's been along road to reach this positive outcome. I would like to personally thank the entire Flagstar team for their dedication and our shareholders for their support. I also appreciate the Fed's collaboration over the past several years to strengthen our company. We are now focused on continuing our journey to build a great company."

[caption id="attachment_5423" align="alignleft" width="142"] Molly Boesel: Rents are increasing in most cities across the U.S.[/caption]

Across the U.S., rents increased 2.7 percent in March, with the largest increase found in low-end rental prices. That’s because low rental home inventory, relative to demand, caused single-family rental prices to increase, according to Corelogic’s Single-Family Rent Index, which analyzes price changes nationally and among 20 metropolitan areas.

Year-over-year single-family rent price increases have slowed since February 2016, when they peaked at 4.2 percent, though they have increased since 2010. “Most metropolitan areas are seeing steady rent increases both month over month and year over year, with [southern metropolitan areas] showing the fastest growth,” said Molly Boesel, principal economist at CoreLogic.

Rent prices among low-end increased 3.9 percent in March 2018, a drop from a 4.4 percent increase in March 2017. Low-end properties are those with rent prices less than 75 percent of the regional median. While prices for low-end rentals are still outpacing the high-end market, a decrease in the growth rate could signal that prices are beginning to stabilize.

High-end rentals, or properties with rental prices greater than 125 percent of a region’s median rent, pulled down national rent growth in March 2018. High-end rent prices increased 2.3 percent year over year in March 2018, up from 1.8 percent compared to March of 2017.

Among the 20 metropolitan areas, Las Vegas had the highest year-over-year increase in single-family rents in March 2018 at 5.5 percent compared with March 2017, followed by Phoenix 5.4 percent, and Orlando, 5.2 percent. For the fifth consecutive month, Honolulu was the only metro with decreasing rent prices, declining 0.4 percent year over year in March 2018.

Metro areas with limited new construction, low rental vacancies and strong local economies that attract new employees tend to have stronger rent growth. Both Orlando and Phoenix experienced high year-over-year rent growth, driven by employment growth of 3.5 percent and 3.2 percent year over year respectively.

This is compared with the national employment growth average of 1.6 percent, according to data from the Bureau of Labor Statistics. Of the 20 metros analyzed, Chicago experienced the lowest employment growth, which could be a factor in its low rent growth of 0.6 percent. Rent prices continue to increase in disaster-struck areas like the Houston metro area, which experienced growth of 3.4 percent year over year in March 2018. This is up from a 2.7 percent increase in February 2018 and a 1.1 percent increase in October 2017, which was the first rent increase for Houston since April 2016.