CoreLogic US Home Price Report Aug 2017

[Rick Moccino]

"Of the nation's 10 largest metropolitan areas measured by population, four were overvalued in June according to CoreLogic Market Conditions Indicators (MCI) data. These four metros include Denver-Aurora-Lakewood, CO, Houston-The Woodlands-Sugar Land, TX, Miami-Miami Beach-Kendall, FL and Washington-Arlington-Alexandria, DC-VA-MD-WV. By comparing home prices to their long-run, sustainable levels, which are supported by local market fundamentals such as disposable income, the MCI categorizes home prices in individual markets as undervalued, at value or overvalued. Because most homeowners use their income to pay for home mortgages, there is an established relationship between income levels and home prices. The MCI defines an overvalued market as one in which home prices are at least 10 percent higher than the long-term, sustainable level, while an undervalued market is one in which home prices are at least 10 percent below the sustainable level."

https://www.cnbc.com/2017/08/01/four-major-us-citi...

Comments?

I looked at the CoreLogic report and couldn't really find the exact numbers they are using, i.e. home to income or MCI data, to substantiate this.

Their HPI shows DC at +4% in the past year and 4% projected over next year, below the national rates, which may support the idea of overvalued but not on the basis of the method used in the article.