Dive Brief:
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For the 35th consecutive month, home prices rose in January when compared with the same month a year earlier, the CoreLogic Home Price Index showed on Tuesday. But they’re still below their pre-recession high point.
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The property information company has forecast that prices will continue to increase between now and next January, when it predicts homes will cost 4.9% more than they do today.
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Home prices were up 5.6% over January 2014, and rose 1.4% since December, but are 8.6% lower than their April 2006 peak. The numbers exclude distressed sales.
Dive Insight:
The increase in housing prices is due, in large part, to the lack of homes for sale on the market. Although the slow growth in home values might persuade the owners of some existing dwellings to put them on the market and buy replacement homes, CoreLogic and others are predicting that inventory will remain tight for the foreseeable future.
One reason: Continued low interest rates lured many homeowners to refinance, a sign that they may be staying put for the time being. And although more millennials are expected to begin buying their first homes this year, it could take an even stronger job market and higher wage increases to convince more potential buyers to enter the market and boost the housing recovery.
