Dive Brief:
- U.S. home prices, including distressed sales, rose 1.8% between March and April and 6.2% between April 2015 and April 2016, CoreLogic reported in its Home Price Index Tuesday.
- Also in its report, CoreLogic predicted home prices will rise 0.9% between April and May, and 5.3% between April 2016 and April 2017.
- April's 1.8% price increase was, once again, higher than CoreLogic's prediction last month of a 0.7% rise.
Dive Insight:
CoreLogic Chief Economist Frank Nothaft attributed the steep rise in home prices to tight available inventory and low mortgage rates. "An expected gradual rise in interest rates and more homes offered for sale are expected to moderate appreciation in the coming year," he said in a release.
The lack of available inventory has been an ongoing concern for the housing market, as real estate groups have called on homebuilders to ramp up new home construction. Builders, however, counter that the ever-rising cost of regulations has kept them out of the entry-level home market.
CoreLogic President and CEO Anand Nallathambi said the strong price home appreciation in the last year "reflects the gathering pace of the recovery in housing in most states and regions in the U.S."
CoreLogic signaled that it is confident new home construction will increase in the coming months. That prediction could already be coming to fruition, as housing starts surged 6.6% last month.
A recent Census Bureau report revealed that median size of single-family homes has grown 11% in the last 10 years to a record 2,467 square feet — 61% bigger than 40 years ago. That desire for larger homes could also be playing into higher-than-expected home price growth.
