The CoreLogic report for May is another report on house prices still move higher. The year-on-year increase in May of 15.4 percent was the highest since 2005. On a monthly basis, the increase from April to May was 2.3 percent. Detached properties grew at a rate of 17.2 percent, almost double the 9.1 percent rate for adjoining properties, as potential buyers continue to look for more space.
The company says many Millennials and Generation Z homebuyers continue to enter the hot market thanks to low lending rates, but high prices are likely
Detering an increasing number of potential buyers – especially first families and low-income families. Currently, in a recent CoreLogic survey, 82 percent of consumers cited housing affordability as a major concern, and 33 percent said they would wait to buy or not buy at all instead of making compromises.
CoreLogic’s forward-looking Home Price Index Home predicts a slowdown in home prices over the next year. The annual increase in May 2022 is projected to be 3.4 percent as affordability issues discourage potential buyers and slow price growth.
“Are first time buyers
hit a wall in many places across the country as the rise in home prices outweighs the benefits of lower borrowing costs. Younger buyers and first-time buyers, including younger millennials, face the challenge of having adequate savings for a down payment, closing costs and cash reserves, “said Frank Martell, President and CEO of CoreLogic in 2021, we anticipate further price increases, which potential buyers in many areas very much forcing out of the market and slowing home price growth next year. “
Home prices rose sharply in the west, with Twin Falls, Idaho, seeing the highest year-over-year increase in any metropolitan area
35 percent. Coeur d’Alene, Idaho, took second place with a annual increase of 32 percent. At the state level, Idaho and Arizona had the strongest price increases at 30.3 percent and 23.4 percent, respectively. Utah ranked third at 20.4 percent as homebuyers look for cheaper, lower-density locations with attractive outdoor spaces.
“There are significant differences in today’s price hike compared to 2005, which was a bubble fueled by risky credit and lenient underwriting, “said Dr. Frank Nothaft, Chief Economist at CoreLogic.” Today, high-risk credit is lacking and mortgage loans are prudent. However, demand and supply imbalances – fueled by a decline in mortgage rates to less than half of 2005 levels and a shortage of homes for sale – have fueled the recent surge in sales prices.