CoreLogic’s Home Price Insights for June are in, with the real estate data analytics company reporting a 1.0% bump in home prices compared with the prior month, as well as a 4.9% year-over-year gain.
Both figures signal strength in the marketplace, with June’s annual increase much larger than May’s 4.1% year-over-year growth and the monthly gain registering as the fastest for June since 2013.
As has been the case throughout the COVID-19 pandemic, a favorable mortgage rate environment has helped buttress the marketplace, enticing borrowers into the fray to increase demand and boost price appreciation. Historically short supply has also played its part, fueling competition for limited listings.
“Mortgage rates hit record lows this spring, which enhanced affordability for home buyers,” said Dr. Frank Nothaft, chief economist at CoreLogic. “First-time buyers, and millennials in particular, have jumped at the opportunity to achieve homeownership.”
Price growth continues to be generally uneven geographically, with some areas of the country seeing rapid acceleration while others reporting prices slump. Nine of CoreLogic’s top 10 tracked metros saw annual price growth, ranging from 4.8% in Washington, D.C., 4.5% in San Diego and 4.4% in Houston.
Just one of those top 10 markets — San Francisco — saw prices retreat yearly, with the City by the Bay’s June home price down 0.2% from the same month last year. The drop, in part, is fueled by a drop in demand among San Francisco’s sizable tech worker base; with many in the industry now working remotely, some chose to relocate to more affordable areas.
Western states continue to lead the country in year-over-year price growth. Of the five states with the highest year-over-year home price change in June, just one — Maine — was east of the Mississippi. The Pine Tree state was fifth, following Idaho, Montana, Missouri and Arizona.
Despite the hefty June jumps, CoreLogic expects monthly price growth to slow, forecasting an increase of just 0.1% between June and July. Prices are still expected to slacken year over year, with June 2021 prices forecast at a 1.0% reduction from June 2020. Unchanged from earlier in the spring, 2021 will mark the first year in more than nine years that CoreLogic expects a home price decline, although the company’s officials still expect the housing market to stay resilient in the midst of the greater financial downturn.
“As we move forward, we expect these price increases to moderate over the next twelve months,” said Frank Martell, president and CEO of CoreLogic. “Given the economic outlook, housing remains a bright spot for the foreseeable future.”
