Home prices were expected to decrease by 0.1% from May to June, according to CoreLogic’s May forecast. Instead, they rose 1%, the company said in a Tuesday release.
Home prices “really rebounded much more strongly than I think any of us had thought they were going to,” CoreLogic Chief Economist Frank Nothaft told Barron’s, crediting millennial buyers taking advantage of historically low interest rates and a limited supply of homes for sale. Home prices grew 4.9% year over year in June, up from a revised 4.1% year over year in May, according to the company’s June Home Price Index and HPI Forecast, released Tuesday.
The 1% increase in June represents the fastest June gain since the same month in 2013, CoreLogic said. Prices are forecast to grow 0.1% on a month-over-month basis between June and July, according to the company’s report.
CoreLogic also updated its home-price index forecast for the next 12 months, which shows home prices decreasing 1% on a year-over-year basis by June 2021. That’s a significant change from the CoreLogic HPI forecast released last month, which predicted that home prices would decline 6.6% between May 2020 and May 2021.
The change in forecasted severity is largely due to an updated unemployment projection provided by IHS Markit that is less severe than it was in May, Nothaft said. In terms of year-over-year growth, the HPI forecast shows strong price growth throughout the summer that starts to slow into the fall, Nothaft said. “It’s not until we get to the spring 2021, traditional home buying season, that we actually start to record home-price change that’s flat or negative,” he adds.
Next spring, Nothaft says he expects “a kind of a reversal of what we see right now” as home-buyer demand weakens and more homes for sale enter the market. “Hopefully, with the pandemic having receded and perhaps a vaccine being available, many of the home sellers who decided not to list their home and not to sell their home in 2020, they may be ready to put their home on the market in 2021,” Nothaft said.
Less demand and more supply could translate to weakness in home prices, Nothaft said, adding that some places in the country will likely continue to see modest home-price growth, while others will see price decreases. “In particular, one market we’re concerned about in Las Vegas,” Nothaft said, citing the city’s reliance on hospitality, entertainment, and tourism. “That is the core of the economic environment in Las Vegas, and all of all of those sectors have been whacked.”
Email: shaina.mishkin@dowjones.com
"continued" - Google News
August 04, 2020 at 10:02PM
https://ift.tt/2Pm3tZJ
The Housing Market Shows ‘Continued Strength and Resiliency.’ What That Means for Home Prices. - Barron's
"continued" - Google News
https://ift.tt/2WiTaZN
https://ift.tt/2YquBwx
Bagikan Berita Ini
0 Response to "The Housing Market Shows ‘Continued Strength and Resiliency.’ What That Means for Home Prices. - Barron's"
Post a Comment