Dive Brief:
- U.S. home prices, including distressed sales, bumped up 0.8% between November and December and 6.3% between December 2014 and December 2015, CoreLogic reported in its Home Price Index Tuesday.
- CoreLogic also predicted home prices will increase a slight 0.2% between December 2015 and January 2016, and 5.4% between December 2015 and December 2016.
- The 0.8% price growth in December was significantly higher than CoreLogic's prediction last month of no change between November and December.
Dive Insight:
Anand Nallathambi, CoreLogic's president and CEO, said he expects price growth to slow in the coming months due to ramped up single-family construction and improved inventory conditions, especially in urban areas and the coasts.
However, he added, "In the short and medium term, local markets with strong employment growth are likely to experience a continued rise in home sales and price growth well above the U.S. average."
Affordability concerns have plagued the housing market's recovery, as first-time buyers struggle to save for down payments and make the leap from renting to homeownership. In December, Zillow predicted the market in 2016 would be affected by "deteriorating affordability," particularly among young renters and first-time homebuyers. The site also said that home prices would grow so fast that the bottom third of wage earners would be priced out of the housing market altogether.
If CoreLogic's prediction of a coming slowdown in home price growth is correct, the residential industry will likely see an influx in the long-awaited first-time buyer segment.
