Despite the coronavirus outbreak and looming recession, national home prices continued their upward trend in June, rising 4.9 percent year over year, according to the latest data from property analytics provider CoreLogic.
The numbers are up in part due to pent-up demand and in part due to historically low mortgage rates, which allowed many potential buyers to secure a home purchase even amid the difficulties wrought by the pandemic.
“Mortgage rates hit record lows this spring, which created affordability for home buyers,” Dr. Frank Nothaft, chief economist at CoreLogic, said in a prepared statement. “First-time buyers, and millennials in particular, have jumped at the opportunity to achieve homeownership.”
But despite a strong spring and summer, CoreLogic still predicts a drop in home price growth by 2021, as different states struggle to contain the coronavirus outbreak. While cities like Philadelphia benefited from New Yorkers fleeing to the city from the virus and saw home values rise 8.4 percent in June, other cities saw much smaller gains and even drops.
According to CoreLogic, cities with some of the biggest COVID-19 outbreaks are most at risk of seeing home values drop in the coming months and year. These include Arizona’s Prescott and Lake Havasu; Las Vegas; Peoria in Illinois and Worchester in Massachusetts.
“Home price appreciation continues at a torrid pace reflecting fundamental strength in demand drivers and affordability,” Frank Martell, the president and CEO of CoreLogic, said in a prepared statement. “As we move forward, we expect these price increases to moderate over the next twelve months. Given the economic outlook, housing remains a bright spot for the foreseeable future.”