Residential Real Estate News
Home Price Growth in U.S. Hits 17.2 Percent Annually in July
Biggest Price Spike Since the Late-1970s
According to CoreLogic's latest Home Price Index and HPI Forecast for June 2021, despite the economic ups and downs brought on by the pandemic, the U.S. housing market is still going strong.
As supply and demand pressures endure and construction costs spike, in June 2021, home price gains reached the highest annual growth since 1979. While affordability challenges intensify, low mortgage rates, rising savings and an improving labor market are helping to keep homeownership within reach for many prospective buyers. However, CoreLogic projects home price gains may slow over the next 12 months as demand moderates and for-sale inventory rises.
"Home prices have been rising in the mid-single digits for some years now. The recent surge to double-digit price jumps reflect the convergence of exceptional demand and persistent low supply," said Frank Martell, president and CEO of CoreLogic. "With plenty of cash on the sidelines, along with very low mortgage rates, prices are heading up and affordability will become a more acute issue for the foreseeable future."
"The pandemic sparked an increase in buyer desire for lower density neighborhoods and more living space -- both inside and outside their home," said Dr. Frank Nothaft, chief economist at CoreLogic. "Communities with single-family detached houses fill this need. Detached homes had the highest annual growth in June since the inception of the CoreLogic Home Price Index in 1976."
Top CoreLogic Report Takeaways:
- Nationally, home prices increased 17.2% in June 2021, compared to June 2020. On a month-over-month basis, home prices increased by 2.3% compared to May 2021.
- In June, appreciation of detached properties (19.1%) was the highest measured since the inception of the index and nearly double that of attached properties (10.7%) as prospective buyers continue to seek more living space and lower density communities.
- Home price gains are projected to slow to a 3.2% increase by June 2022, as ongoing affordability challenges deter some potential buyers and an uptick in new for-sale listings cause a slowdown in home price growth.
- In June, home prices rose sharply in the west with Twin Falls, Idaho, experiencing the highest year-over-year increase at 40.2%. Bend, Oregon, ranked second with a year-over-year increase of 35.4%.
- At the state level, Idaho and Arizona continued to have the strongest price growth at 34.2% and 26.1%, respectively. Montana also had a 24.3% year-over-year increase as home buyers seek out more affordable locations with lower population density and attractive outdoor amenities.
