Dive Brief:
- Home prices, including distressed sales, across the U.S. increased 1.7% between June and July, and 6.9% between July 2014 and July 2015, CoreLogic reported in its Home Price Index.
- Prices in 15 states reached peaks since CoreLogic started the index in 1976. Those states include: Alaska, Arkansas, Colorado, Hawaii, Iowa, Kentucky, Montana, Nebraska, New York, North Carolina, North Dakota, Oklahoma, South Dakota, Tennessee and Texas. Only two states — Massachusetts and Mississippi — experienced home price depreciation.
- CoreLogic also predicts that home prices will rise by 0.5% between July and August, and 4.7% between July 2015 and July 2016.
Dive Insight:
CoreLogic Chief Economist Frank Nothaft said, "Home sales continued their brisk rebound in July and home prices reflected that." He was referring to the 5.4% bump in July new home sales and the 2% increase in July existing home sales.
CoreLogic CEO and President Anand Nallathambi attributed the strong growth to strong consumer confidence and low mortgage rates. "Adding to overall housing demand is the benefit of a better labor market which has provided millennials the financial independence to form new households and escape ever-rising rental costs."
But there is a downside to these rising prices. A lack of affordable housing inventory on the market has kept first-time buyers away. Especially in the cities where home prices reached new peaks, renters might continue to delay their entrance into ownership.
CoreLogic's prediction of a slowdown in home prices between July and August could be welcome news for those potential buyers, and the overall market anxiously awaiting their arrival.
