Across the U.S., the average cost of a home rose by 0.6 percent from the prior month and 4.1 percent year-over-year, compared to 4.4 percent annually last month. Keep in mind that these numbers reflect trends that were occurring before the coronavirus outbreak hit the country. And since sales typically represent contracts that were signed in the previous two months, CoreLogic expects the pandemic’s effects will start to show in the April data rather than in the March numbers.
“Before the onset of the pandemic, the quickening of home price growth during the first two months of 2020 highlighted the strength of purchase activity,” Dr. Frank Nothaft, chief economist at CoreLogic, said in a prepared statement. “In February, the national unemployment rate matched a 50-year low, mortgage rates fell to the lowest level in more than three years and for-sale inventory remained lean, all contributing to the pickup in value growth.”
While home prices were rising steadily for almost a decade, the pandemic, national stay-at-home orders and soaring unemployment are currently wreaking havoc on both the short-term and long-term economies. CoreLogic expects home prices to grow 0.5 percent from February to March but any predictions beyond that are currently being offset by the ongoing COVID-19 outbreak.
The property analytics provider also expects that government programs and low interest rates will help homeowners in the immediate post-pandemic months, but as that cushion ends, prolonged unemployment could cause serious problems for both individual families and the housing market as a whole.
“The nearly 10-year-old recovery of the U.S. housing market has run headlong into the panic and uncertainty from the global COVID-19 pandemic,” Frank Martell, president and CEO of CoreLogic, said in a prepared statement. “In terms of home value trends, we are in uncharted territory as we battle the outbreak with measures that are generating a never-before-seen, rapid downshift in economic activity and employment.”