Home prices increased
in June at the fastest pace in more than seven years. CoreLogic said its Home
Price Index (HPI) rose 1.0 percent from May, the largest month-over-month gain
since January 2013. The appreciation from April to May was 0.7 percent. Prices
rose year-over-year by 4.9 percent compared to 4.1 percent in May.

 

 

“Home price
appreciation continues at a torrid pace reflecting fundamental strength in
demand drivers and affordability,” said Frank Martell, president and CEO of
CoreLogic. “As we move forward, we expect these price increases to moderate
over the next twelve months. Given the economic outlook, housing remains a
bright spot for the foreseeable future.”

CoreLogic is still
anticipating a COVID-19 induced downturn in prices over the next year, but it
has substantially moderated its forecast since last month.
In July it predicted
that June’s HPI would decline 0.1 percent and that prices would drop 6.6
percent by next May. Now, with the June HPI posting a very strong increase the
company is anticipating only a 1.0 percent decline in prices over the next year
and calls this “A sign of a strong foundation and resiliency in the housing
market in the face of the pandemic.”

The continued strong
home prices, the company says, reflect improved affordability, demographic demands,
supply constraints and continued strong interest in purchasing a home. These
factors combined to keep home prices steady despite the continued pressure of
the pandemic and its related economic fall-out.

There is a lot of
local variability both in current home price growth and that which is predicted
for the future.
Philadelphia saw prices surge by 8.4 percent year-over-over in
June, driven by an uptick in New York City residents purchasing homes, likely
in an effort to migrate from the coronavirus hotspot. Meanwhile, affordability
constraints in San Francisco led to an annual decline in home prices of 0.2
percent.

In markets like Las Vegas, where the local tourism economy
and job market continue to suffer due to the pandemic, home prices are expected
to decline 11.3 percent over the next year. San Diego, on the other hand, is
predicted to have 4.2 percent growth due to a lack of inventory.

The CoreLogic Market
Risk Indicator (MRI), a monthly update of the overall health of housing markets
across the country, predicts that metro areas with an elevated resurgence of
COVID-19 cases-like Prescott and Lake Havasu, Arizona-are at the greatest risk
(above 60 percent) of a decline in home prices over the next 12 months. Other
metro areas at high risk include Las Vegas, Nevada; Peoria, Illinois; and
Worchester, Massachusetts. 

By Jann Swanson , dated 2020-08-05 09:58:15

Source link

Courtesy of Mortgage News Daily

Leave a Reply