CoreLogic’s Home Price Insights monthly report for June 2018 shows home prices nationwide, which includes distressed sales, are up by 6.8 percent. The change between June and May 2018 was an increase of 0.7 percent. The forecast for July 2018 is that prices will level off with no gain. CoreLogic’s forecast is that prices will increase 5.1 percent overall by June 2019.
CoreLogic’s Chief Economist Frank Nothaft has stated, “The rise in home prices and interest rates over the past year has eroded affordability and is beginning to slow existing home sales in some markets. For June, we found in CoreLogic public records data that home sales in the San Francisco Bay Area and Southern California were down 9 and 12 percent, respectfully, from one year earlier. Further increases in home prices and mortgage rates over the next year will likely dampen sales and home-price growth.”
“Home Sales down 12% in Southern California and down by 9% in the San Francisco Bay Area.”
The 2018 CoreLogic Consumer Housing Sentiment Study: June Findings
In 2018, CoreLogic together with RTi Research of Norwalk, Connecticut, conducted an extensive consumer housing sentiment study, combining consumer and property insights. The study assessed attitudes toward homeownership and the drivers of the homebuying or renting decision process. Across the U.S., the desire to own a home is significantly higher among younger age cohorts. Younger millennial renters (those under the age of 29) are significantly more likely to want to buy a home in the next 12 months than older millennial or Generation X renters. However, affordability for this group is a significant issue.
Sixty-three percent of younger millennials who are not interested in home ownership identified the inability to afford a home or down payment as the reason they are not interested in buying at this time. This is in comparison to 50 percent of older millennial renters and 52 percent of Generation X renters. For their part, boomer generation renters say their lack of interest in home ownership is driven by a lack of need at this stage in their lives. The graphic below further illustrates this position across all generations.
President and CEO of CoreLogic Frank Martell states that, “One-third of millennial renters reported feeling they cannot afford a down payment to buy a home. With home prices rising quickly over the past few years and supplied low, first-time homebuyers face ever-growing challenges to find and buy affordable entry-level homes. More needs to be done to help our first-time buyers join the homeownership class.”
“Affordability: 1/3 of millennials renters feel they can’t afford a down payment to buy a home.”
As for South Carolina, the change in home value between June 2017 and June 2018 was 5.5 percent. The projection for June 2019 is 5.1 percent higher. Month over month percent increase is showing an actual of.7 percent and projected 0.6 percent.
Our closest Top U.S. Metro area, Washington, D.C. which is now showing a 2.9 percent home price index change over the same time last year.
The latest market conditions indicators Metro area maps for June 2018 is showing Greenville-Anderson-Mauldin are overvalued and that trend will continue into June 2023. Our neighboring metro area to the north Spartanburg is showing normal valuation which will continue into June 2023. Columbia metro area continues to be undervalued. While the coastal areas of Charleston, North Charleston, Hilton Head Island, Bluffton and Beaufort continue to be overvalued.
The impact of this latest monthly report shows that although younger renters wish to own a home they are lacking the sentiment that they can afford to buy an entry-level home. Unless mortgage companies are willing to offer programs specifically aimed at the younger first-time buyer to assist them with qualifying for loans, this sentiment will continue. As younger millennials continue to move out of their parent’s homes, rentership will increase making the profitability of being an investment real estate buyer more appealing. Contact me today to see how you can gain a real estate investment portfolio.
And remember if you, a friend or family member need assistance with selling or buying a home I can help. Referrals and people needing relocation assistance are welcome! Search Single Family homes in Greenville. Search Condos and Townhomes in Greenville.