CoreLogic reports home prices rose 5.4% annually in April 2020, exceeding the Home Price Index (HPI) report’s 3.6% gain from April 2019.
While this acceleration could be a result of falling housing supply due to COVID-19, the pandemic has led to an economic downturn, which, according to CoreLogic, could lead to the HPI falling 1.3% by April 2021.
If this prediction holds, this would be the first decline in home prices in more than nine years.
The HPI has increased annually every month since February 2012 and has gained 68.2% since March 2011. As of April 2020, the overall HPI was 13.3% higher than its pre-crisis peak in April 2006.
First American Deputy Chief Economist Odeta Kushi said as “pent-up demand” from the delayed spring-buying season, potential homebuyers have limited inventory to choose from.
“Lack of supply relative to demand is a sure-fire recipe for increasing house price appreciation,” she said.
She added that as more homeowners were “reluctant” to list their homes for sales during the pandemic, available homes available for potential buyers had dwindled further.
“The pandemic-driven economic uncertainty and concerns about the potential health risks associated with showing homes to buyers have made existing homeowners more hesitant to list their homes for sale, exacerbating the increasing tenure issue,” Kushi said.
CoreLogic states homes in the lowest-price tier rose 7.7% year-over-year in April 2020, compared with 6.7% for the low-to middle-price tier; 5.9% for the middle-to moderate-price tier; and 4.8% for the high-price tier.
Additionally, it was the lowest-priced homes that showed the fastest acceleration in prices in April from last year. Prices on lower-tier homes increased by 106.6% since 2011.
Like it has since late 2018, Idaho led the nation in appreciation at 12% in April. Alaska reported a price appreciation of just 1%.
Prices in 43 states, including the District of Columbia, are higher than their pre-crisis peaks.
Home prices in Connecticut in April 2020 were the furthest below their all-time HPO high, standing at 15.8% below their July 2006 peak.
Declining home prices were most pronounced in Nevada, which saw prices drop 5.4% annually.