Despite COVD-19’s vice-like grip on the national focus and nightmarish economic consequences, home prices remained steady in April, according to CoreLogic.
With a year-over-year growth rate of 4.7%, the highest 12-month gain since December 2018—maintaining the nine consecutive months of steady increases, the 1.01% month-to-month increase is the most rapid since April 2018, according to the national Case-Shiller Index.
Seemingly overlooking stay-at-home orders and a virtual nationwide freeze in housing markets, the unblemished price growth is a sign of continued homebuyer demand, which is further muscling an additional historical sag in interest rates, the Index found. The 30-year fixed-rate mortgage is at its lowest since the spring of 2013. It drooped even lower after April.
In the shadow of the pandemic, the housing market’s also received a significant boost from favorable demographics--particularly millennials reaching the home-buying age.
Meantime, the 10-and 20-city composite indexes also continued to balloon. In April, the 20-city index experienced more rapid growth. Some of the smaller metro areas, where housing demand this year has flashed particular brawn, is covered by that index.
From a geographic standpoint, for the 11th month in a row, with a jump to 8.8% compared to last April, Phoenix, which is included in the 20-city S&P CoreLogic Case-Shiller Indexes, kept up the highest growth rate in home prices. Seattle, again, was second at 7.3% year over year.
On the other hand, where the 12-month homes continued their spiral, included New York at 2.5% and Chicago, 1.4%. However, compared to the prior month, New York’s rate of growth caught a tail breeze in April.
Since March, with its full percentage point increases from 5.3% last month to 6.4% in April, Minneapolis was the region with the largest price growth. That’s not to overlook Cleveland, which accelerated similarly. Conversely, San Francisco, down 1%; Portland, Oregon, (-0.6%); and Boston (0.5%) were the regions with the most tepid acceleration in home prices.
Down the line, a degree of depression in home sales and price growth in areas where outbreaks of the virus are emerging could be in the cards in upcoming data.
Despite COVID-19’s apparent lack of impact on housing prices, Urban Institute reported that as the price tags on homes escalate, for potential homebuyers with low includes, coming across affordable properties isn’t so easy. Consequently, they continue to rent, creating a spice in prices and stoke the demand for and price of those properties noted Urban. Translation? Among low-income households, the cost of owning and renting is hitting the pocketbook harder. At the same time, their incomes are failing to keep pace.
If supply constraints, which predate the pandemic, remain unchecked, the cost of low-price homes and rentals will maintain their ascent more quickly than the price tags for high-price homes—broadening residual income inequality between low-and high-income homeowner and renter households, DSNews also reported.