Nationwide home prices grew 20.9% year over year in April as buyers continue to race against increasing mortgage rates in an effort to fine affordable homes, according to CoreLogic.
The annual price gain in the company’s most recent Home Price Index (HPI) report marks the 123rd consecutive month of year-over-year increases. April’s yearly jump is yet another record high as the continued climb of rates pushed buyer urgency. Rising rates have thus far done little to deter price appreciation, which has cooled but remains strong, with 70% of homes selling for more than their asking price during the spring.
Patrick Dodd, president and CEO of CoreLogic, also pointed to the ongoing shortage of for-sale homes as another key driver of home-price increases.
“The record growth in home prices is a result of a scarcity of for-sale inventory coupled with eager buyers who want to purchase before mortgage rates go higher,” Dodd said. “Buyers who closed on their home in April had locked in their mortgage rate in February or March, when rates were lower than today.”
No states saw a year-over-year decrease in home prices during April. Florida (with an annual home-price gain of 32.4%), Arizona (28.1%) and Tennessee (27.2%) saw the highest yearly increases in the HPI. Among the top 10 metros tracked by CoreLogic, Phoenix posted the largest year-over-year gain at 29.7%, followed by Las Vegas at 27.1% and San Diego at 26%.
Sooner or later, however, continued growth in mortgage rates will further soften buyer demand and cause home-price appreciation to slow.
“With 30-year fixed mortgage rates much higher now, we expect to see waning buyer activity because of eroding affordability,” Dodd said. “As a consequence, our forecast projects slowing price growth over the coming year.”