says home prices in January were 10 percent higher than a year earlier. It was
the first double digit increase in the company’s Home Price Index (HPI) since
November 2013
. The company had reported a 9.2 percent annual increase in
December. The month-over-month increase in home
prices nationwide, including distressed sales, was 0.9 percent.

Frank Martell, President and CEO of
CoreLogic said, “Record-low mortgage rates were a significant driving force
behind last year’s rebound in housing market activity. However, heavy
competition for the few houses on the market drove home prices to historic
highs, and mortgage rates are no longer enough to sway the affordability
challenges for consumers. While new construction may help balance home prices
towards the end of 2021, we may expect to see demand slow in the medium-term.

In a survey conducted last month by CoreLogic, nearly 76
percent of U.S. non-homeowners, aged 18 or older, said they have no plans to
purchase a home within the next six months. Forty-three percent said the
biggest deterrent was affordability constraints, specifically, not having
enough money for a down payment or mortgage.

“Despite first-time buyers driving high demand, entry-level
homes remain in short supply. Homes priced below 75 percent of the local median
price had 14 percent annual appreciation, negating most of the benefits of
record-low mortgage rates”, according to Frank Nothaft, CoreLogic’s chief
economist. “When interest rates rise, the affordability squeeze for first-time
buyers will become even more of a challenge.”

The states with the highest
increases year-over-year were Idaho (21 percent), Montana (17.4 percent), and Indiana
and Main, each with15.3 percent gains. There were no states where prices

This graph shows a comparison of the
national year-over-year percent change for the CoreLogic HPI and CoreLogic
Case-Shiller Index from 2000 to present month with forecasts one year into the
future. We note that both the CoreLogic HPI Single Family Combined tier and the
CoreLogic Case-Shiller Index are posting positive, but moderating
year-over-year percent changes, and forecasting gains for the next year.



CoreLogic forecasts that its HPI
will rise on a month-over-month basis  by
0.5 percent from January to February 2021 and by 3.3 percent for the 12 months
ended in January 2022.

While home price changes on the
local level vary, January gains across all the top 10 metros surpassed their
2020 levels
. Even in metro areas with significant affordability constraints, price
gains persist. For instance, home prices in San Diego increased 11 percent over
the last year and are forecast to increase an additional 9.6 percent over the
next 12 months.

Conversely, The HPI Forecast also
reveals the continued disparity in home price growth across metros. In markets
like Houston, which was hit hard by the collapse of the oil industry and the
recent hurricane season, home prices are expected to decline 0.7 percent by
January 2022.

By Jann Swanson , dated 2021-03-02 12:22:07

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Courtesy of Mortgage News Daily

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