CoreLogic’s latest Home Price Index (HPI) [1]reports that national home prices rose 4% year-over-year in January and are projected to increase by 5.4% by January 2021.
January’s HPI gain, though, was down from January 2019’s increase of 4.2% but up from December 2019’s 3.8% increase.
The HPI has risen on an annual basis every month since February 2012—January marked the eighth year of rising home prices. CoreLogic states that the index has gained 63% since March 2011 and it is 9.6% higher than the pre-crisis peak recorders in April 2006.
Homes priced in the lowest tier saw prices rise 5.7% annually in January 2020. Middle-price tier homes rose 5.1%, and a 3.7% increase was reported in the high-price tier.
Cumulative price gains since 2011 were the highest in lower-priced homes, as values have risen 97%.
Idaho continued its streak on nation-leading appreciation, reporting home prices rose by 10.5% in January. South Dakota came in behind Idaho with an appreciation of just below 10%.
Connecticut was the only state to report falling home prices with a 0.1% decline from January 2019. Nevada saw prices rise 3.3% year-over-year in January 2020—a 6.7 percent point slowdown from the 10% increase in January 2019.
While home prices are rising, CoreLogic recently reported that the average mortgage payment is falling. [2] Homeowners saw their average mortgage payment fall 6.8% in December 2019, mostly due to a 20% decline in mortgage rates.
Mortgage rates have fallen from 4.64% in December 2018 to 3.72% in December 2019.
The HPI and HPI Forecast predicts home prices will rise in 2020 by an average of 4.6%. Mortgage payments are expected to increase just 2.7% during the year as rates are predicted to be 0.2 percentage points lower than the year prior.
The average mortgage payment in December 2019 was 35.8% below the all-time high of June 2006’s $1,298. The mortgage rate in June 2006 was 6.7% and the average sales price was $197,000.
Black Knight’s January 2020 Mortgage Monitor [3]reported that refinancing rose 250% annually to hit a six-and-a-half-year high in Q4 2019. Cash-out lending rose to a more than 10-year high.