Tuesday, March 02, 2021

CoreLogic: House Prices up 10.0% Year-over-year in January

by Calculated Risk on 3/02/2021 08:35:00 AM

Notes: This CoreLogic House Price Index report is for January. The recent Case-Shiller index release was for December. The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA).

From CoreLogic: In High Gear: Annual US Home Price Appreciation Reaches Double Digits in January, CoreLogic Reports

CoreLogic® ... today released the CoreLogic Home Price Index (HPI™) and HPI Forecast™ for January 2021.

2020 was a landmark year for the housing market. Factors such as record-low mortgage rates encouraged first-time homebuyers to dip their toe into the housing market and allowed home price growth to remain strong, despite economic uncertainty. The momentum continued into 2021, with home price growth experiencing its first double-digit annual appreciation since November 2013 in January at 10%. However, as we look forward to the rest of 2021, we may expect to see challenges for some prospective homeowners.
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“Record-low mortgage rates were a significant driving force behind last year’s rebound in housing market activity,” said Frank Martell, president and CEO of CoreLogic. “However, heavy competition for the few houses on the market drove home prices to historic highs, and mortgage rates are no longer enough to sway the affordability challenges for consumers. While new construction may help balance home prices towards the end of 2021, we may expect to see demand slow in the medium-term.”
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Nationally, home prices increased 10% in January 2021, compared with January 2020. On a month-over-month basis, home prices increased by 0.9% compared to December 2020.

“Despite first-time buyers driving high demand, entry-level homes remain in short supply,” said Dr. Frank Nothaft, chief economist at CoreLogic. “Homes priced below 75% of the local median price had 14% annual appreciation, negating most of the benefits of record-low mortgage rates. When interest rates rise, the affordability squeeze for first-time buyers will become even more of a challenge.”
emphasis added