CoreLogic home price insights and forecasts through May 2022. Insights and forecasts for two housing tiers – attached and detached single-family housing and single-family combined.
CoreLogic’s May 2021 National Home Prices
As of May 2021, CoreLogic indicated that home prices nationwide increased by +15.4% y/y. Also nationwide, home prices increased +2.3% in May 2021 m/m compared with April 2021 prices.
This +15.4% y/y home price increase in May is the highest level of home price growth since 2005.
CoreLogic’s Home Price Index (HPI) Forecast indicates that home prices will increase +0.8% m/m from May to June 2021 and +3.4% y/y from May 2021 to May 2022.
Frank Martell, President and CEO of CoreLogic, said, “First-time buyers are hitting a wall in many places around the country as the pace of home price rises outpace the benefits of lower borrowing costs. Younger and first-time buyers, including younger Millennials, are faced with the challenge of having sufficient savings for a down payment, closing costs and cash reserves. As we look to the balance of 2021, we expect price rises to continue which could very well push prospective buyers out of the market in many areas and slow price growth over the next year.”
COVID Impact on Home Prices
The double-fisted pressures of severe inventory shortages and unrelenting housing demand pushed home prices to all-time highs in May 2021. Though many Millennial and Gen-Z home buyers are, in fact, buying housing in a sizzling hot, frenzied housing market due to low borrowing rates, many (including first-time and low-income families) are not.
CoreLogic learned in one of its recent surveys that 82% of consumers are pointing to housing affordability as a central problem/deterrent when considering a decision to buy or not to buy a house. In addition, 33% of consumers indicate they would delay or not buy a house at all rather than having to make sacrifices on a home purchase due to too-high home prices.
Dr. Frank Nothaft, Chief Economist with CoreLogic, said in comparing the home price jumps of 2005 and 2021, “There are marked differences in today’s run-up in prices compared to 2005, which was a bubble fueled by risky loans and lenient underwriting. Today, loans with high-risk features are absent and mortgage underwriting is prudent. However, demand and supply imbalances – fueled by a drop in mortgage rates to less than one-half what they were in 2005 and a scarcity of for-sale homes – has fed the latest run up in sales prices.”
State-Level Home Price Changes
As national home prices increased +15.4% y/y, not one state posted an annual decline in home prices during May.
The 10 states with the highest home price changes y/y included:
- Idaho 30.3%
- Arizona 23.44%
- Utah 20.44%
- Indiana 20.2%
- Montana 19.5%
- Rhode Island 19.3%
- Vermont 19.2%
- Washington 19.1%
- New Hampshire 18.9%
- Oregon 17.6%
Metro-Level Home Price Changes
These 10 metros experienced the highest home price changes y/y in May 2021:
- Phoenix 23.9%
- San Diego 18.8%
- Denver 16.4%
- Las Vegas 14.1%
- Washington DC 12.2%
- Los Angeles 11.5%
- Boston 10.1%
- Miami 8.7%
- Houston 8.3%
- Chicago 6.4%
Thanks to CoreLogic.
