Frank Nothaft, chief economist for CoreLogic tells CNBC, "Higher mortgage rates slowed home sales and price growth during the second half of 2018," and based on current conditions, forecasts average annual value growth of 3.4 percent in 2019. Broadly, the data show that fewer markets are considered overvalued--40 percent of the top 50 U.S. markets today versus more than half one year ago.
Prices are still rising because of the shortage of homes for sale, especially on the lower end of the market. But rising mortgage rates took their toll on affordability last year, causing sales to slow. Prices usually lag sales by several months. Says Nothaft, "Annual price growth peaked in March and averaged 6.4 percent during the first six months of the year. In the second half of 2018, growth moderated to 5.2 percent.