CoreLogic released their Home Price Index report for April, showing that Home prices increased 2.1% during the month alone. Prices rose 13% year over year, which is up from 11.3% in the previous report. CoreLogic forecasts that home prices will rise 1.1% in May, which is the same level they forecasted for April. They were just a bit off – they forecasted only 2.8% in the year going forward, which is surprising considering they forecasted 1.1% in the next month alone. Top Metros:
- Phoenix 21%
- San Diego 16%
- Denver 14%
CoreLogic also states that Baby Boomers are staying in their homes longer, which may be affecting inventory. This group is staying for a median of 13 years, which is 50% longer than the previous generation. Even if they become comfortable listing their homes, they are faced with the reality that if they sell they may get a smaller home for the same price or won’t be able to find a home. As we already know, there continues to be the challenges on the new construction front with builders facing high labor costs and material costs. Inventory levels are down almost 50% compared to 2019, which is a big reason for the appreciation we have seen.
Pending Home Sales, which measures signed contracts on existing homes, decreased by 4.4% in April. All due to a lack of inventory and demand to buy homes. Year over year Pending Sales are up 51%. But let’s face it, that’s because last year no one was signing contracts as the pandemic was in full swing.