While home values have been growing steadily since 2012, the coming year could bring with it much more dramatic increases.
Home prices in November increased 0.5 percent in a month and 3.7 percent year-over-year, according to the latest CoreLogic Home Price Index and Forecast report released on Tuesday. Idaho, Maine and West Virginia saw the largest annual growth in November, with prices increasing 10.2, 8.6, and 6.9 percent, respectively.
CoreLogic predicts that nationwide home prices will spike 5.3 percent by November 2020.
The reasons for the projected growth go beyond a strong economy and job growth. Even as we hear of overvalued housing markets in places like Denver and New York, other parts of the country are undervalued and ready for growth.
“The latest U.S. index shows that the slowdown in home prices we saw in early 2019 ended by late summer,” Dr. Frank Nothaft, chief economist at CoreLogic said in a prepared statement. “Growth in the U.S. index quickened in November and posted the largest 12-month gain since February. The decline in mortgage rates, down more than one percentage point for fixed-rate loans from November 2018, has supported a rise in sales activity and home prices.”
As millennials age, many are also starting to consider buying their first home. CoreLogic found that a large number of millennials aged between 30 and 38 are considering moving in the next year — and 64 percent of those are planning to buy a house rather than rent. However, more than half (57 percent) of younger millennials aged 21 to 29, plan to rent At the same time, 43 percent of older millennials still see owning a home as something that’s unattainable for them.
“We’re continuing to see a split among older and younger millennials when it comes to their plans to purchase a home,” Frank Martell, president and CEO of CoreLogic, said in a prepared statement. “While older millennials are looking forward to participating in the housing market in the future, their younger counterparts don’t see themselves buying a home anytime soon.”
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