CoreLogic: Home Price Growth to Accelerate

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U.S. home prices increased an average of 0.9% in May compared with April and were up 3.6% compared with May 2018, according to CoreLogic’s home price index report.

The software, data and analytics firm notes that it revised its data from the previous month.

Annual home price growth by state varied from a 1.7% decline in North Dakota to a 10.7% increase in Idaho.

Currently, CoreLogic is forecasting that U.S. home prices will increase 0.8% from May to June and by 5.6% during the 12 months ended May 2020.

That monthly increase will bring single-family home prices to an all-time high, the firm notes.

The report indicates that while home price appreciation has been slowing, it is expected to pick up velocity again as home sales increase and inventory tightens.

“Interest rates on fixed-rate mortgages fell by nearly one percentage point between November 2018 and this May,” says Frank Nothaft, chief economist at CoreLogic, in a statement. “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.”

The nagging question remains: Will home builders bring on much-needed new inventory to help satiate demand and stabilize prices?

“The recent and forecasted acceleration in home prices is a good and bad thing at the same time,” says 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.”

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