For the first time in 14 months, home price growth is accelerating.
Nationwide, home prices grew by 3.6 percent in May year-over-year and 0.9 percent from April, according to the latest data from CoreLogic. At 10.7 percent, Idaho had the highest growth rate out of all the states. Utah and South Dakota followed at 7.8 percent and 7.7 percent, respectively.
The growth can be attributed to a strong job market and decreased mortgage rates, according to CoreLogic,
“Interest rates on fixed-rate mortgages fell by nearly one percentage point between November 2018 and this May,” said Dr. Frank Nothaft, chief economist at CoreLogic, in a prepared statement. “This has been a shot-in-the-arm for home sales. Sales gained momentum in May and annual home-price growth accelerated for the first time since March 2018.”
As a result, home price growth is on the rise. Last month, home prices grew by 3.6 percent year-over-year and 1 percent over the month. Despite many people’s hopes for a buyer’s market, CoreLogic predicts that home prices will see even steeper growth in the coming year — 0.8 percent by next month but 5.6 percent by May 2020.
Due to years of consistent home price increases, many buyers are worried about their ability to afford a home. According to CoreLogic, 28 percent of homeowners are worried they won’t be able to afford buying a new home in the future. Only half are satisfied with the number of options available in their market while 40 percent believe they will have to relocate.
“The recent and forecasted acceleration in home prices is a good and bad thing at the same time,” said Frank Martell, president and CEO of CoreLogic, in a prepared statement. “Higher prices and a lack of affordable homes are two of the most challenging issues in housing today, and every buyer, seller and industry participant is being impacted.”
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