Valley home prices continued their rise during the summer, easily outpacing national averages in August, according to the latest CoreLogic price report.
The region saw a 7.43 percent price increase compared with August 2017, pushing the region into an “overvalued” ranking from CoreLogic.
Despite the increasing prices, home values still are roughly 11 percent below the peak value in 2006, the report stated.
Nationally, home prices rose 5.5 percent year over year, which actually represents a slowdown from previous months as the lack of affordable housing nationally and higher interest rates means fewer homes are selling.
“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 Frank Nothaft, CoreLogic’s chief economist, in a statement. “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.”
Phoenix homebuilders and real estate agents have cited similar issues in the Phoenix market in recent months, but home prices have continued to rise. Zillow, an online real estate database, reports that the average home value in the Phoenix market reached $231,200 as of the end of September.
As a result of the confluence of events, 38 percent of U.S. markets are considered overvalued. Of the top 50 markets, 48 percent are considered overvalued.
Phoenix Business Journal took a deep dive into the numbers for a cover story in September on the issue of housing affordability.
By Patrick O’Grady