Annual home-price growth reverses course, finally rises
After 14 months of slowing home-price gains, the pace of growth finally picked up speed in May, increasing by 3.6% on an annual basis, according to the latest from CoreLogic.
And, it seems things may pick up steam, with CoreLogic’s forecast predicting home prices will rise 5.6% by May next year.
On a month-over-month basis, home prices rose 0.9% in May, with the forecast predicting a 0.8% increase in June. That would bring single-family home prices to an all-time high, CoreLogic said.
Around the country, home-price growth varied, with Idaho showing the greatest jump at 10.7%, while North Dakota came in last with a 1.7% decline. (See CoreLogic’s chart of home-price growth by state; click to enlarge.)
“Interest rates on fixed-rate mortgages fell by nearly one percentage point between November 2018 and this May,” said Dr. Frank Nothaft, chief economist at CoreLogic. “This has been a shot-in-the-arm for home sales. Sales gained momentum in May and annual home-price growth accelerated for the first time since March 2018.”
A recent CoreLogic survey revealed the dual nature of rising home prices, as it can be both a benefit and a drawback.
According to the homeowners surveyed, 28% said they were concerned they would be unable to afford the purchase of a new home. And, 40% of homeowners who are thinking of selling said they’d have to move outside of their current market to afford another home.
“The recent and forecasted acceleration in home prices is a good and bad thing at the same time,” said Frank Martell, president and CEO of CoreLogic. “Higher prices and a lack of affordable homes are two of the most challenging issues in housing today, and every buyer, seller and industry participant is being impacted. The long-term solution lies in expanding supply, which will require aggressive and effective collaboration between policy makers, state and local government entities and home builders.”
Published at Tue, 02 Jul 2019 14:52:00 +0000