Despite an anticipated nationwide cool-down over the coming year, Americans—especially millennials—maintain substantial interest in purchasing a home, a new report shows.
Strong June Home Prices Followed by Decline
The housing market looks resilient, shows signs of a “solid foundation,” even in the face of the COVID-19 pandemic, said experts in a price-insights forecast issued today.
CoreLogic, the global property information and analytics provider, predicts a modest decline in home prices in the coming year, until spring 2021. This follows the fastest monthly gain in home prices in years and a reportedly robust public interest in purchasing a home despite continued pandemic-related pressures and accompanying economic fallout.
“Mortgage rates hit record lows this spring, which enhanced affordability for home buyers,” CoreLogic’s Chief Economist Frank Nothaft said. “First-time buyers, and millennials in particular, have jumped at the opportunity to achieve homeownership.”
Specifically, CoreLogic’s Home Price Index showed home prices nationwide increased by 4.9% in June 2020, compared with June 2019. Month over month, home prices increased 1%, compared with May of this year, the fastest monthly gain for the month of June since 2013.
Its HPI Forecast predicts a month over month price decrease of .1% in June and a year-over-year decline of 6.6% by May 2021.
According to the CoreLogic Market Risk Indicator, a monthly update of the overall health of housing markets nationally predicts that metro regions with an elevated resurgence of COVID-19 cases face the largest risk of decline in home prices in the coming year. No Texas cities are included in the report’s top markets at risk of home price decline, which included Prescott, Arizona; Peoria, Illinois; Las Vegas, Nevada; Lake Havasu City, Arizona; and Worchester, Massachusetts.
Cities such as Las Vegas—which relies heavily on tourism and is hit harder by COVID-related economic strains—will see the greatest declines. Other cities—San Diego, for example—are expected to increase as much as 4.2% before May 2021 because lack of inventory continues to push prices upward.
For Dallas and most of the country the housing market is healthy and will remain that way for the near term, according to CoreLogic's experts.
“Home price appreciation continues at a solid pace reflecting fundamental strength in demand drivers and limited for-sale inventory,” CoreLogic President and CEO Frank Martell said. “As we move forward, we expect these price increases to moderate over the next twelve months. Given the economic outlook, housing remains a bright spot for the foreseeable future.”