America’s home prices keep rising, increasing unaffordability in many markets
America’s home prices keep rising, increasing unaffordability in many markets.
The latest HPI data from CoreLogic shows that home prices were up 6.6% year-over-year in May and 1.2% compared to April, as tightening inventory intensifies competition.
“For current homeowners, the strong run-up in prices has boosted home equity and, in some cases, spending,” said Frank Martell, president and CEO of CoreLogic. “For renters and potential first-time homebuyers, it is not such a pretty picture. With price appreciation and rental inflation outstripping income growth, affordability is destined to become a bigger issue in most markets.”
The CoreLogic HPI forecast calls for a 5.3% annual increase in prices through May 2018 and for prices in the month from May to June 2017 to rise by 0.9%.
“While the market is consistently generating home price growth, sales activity is being hindered by a lack of inventory across many markets,” said Dr Frank Nothaft, chief economist for CoreLogic. “This tight inventory is also impacting the rental market where overall single-family rent inflation was 3.1% on a year-over-year basis in May of this year compared with May of last year.”
With rents outpacing inflation and wage increases, this will further restrict the ability of potential first-time buyers to save for their ever-increasing downpayment target.
The latest HPI data from CoreLogic shows that home prices were up 6.6% year-over-year in May and 1.2% compared to April, as tightening inventory intensifies competition.
“For current homeowners, the strong run-up in prices has boosted home equity and, in some cases, spending,” said Frank Martell, president and CEO of CoreLogic. “For renters and potential first-time homebuyers, it is not such a pretty picture. With price appreciation and rental inflation outstripping income growth, affordability is destined to become a bigger issue in most markets.”
The CoreLogic HPI forecast calls for a 5.3% annual increase in prices through May 2018 and for prices in the month from May to June 2017 to rise by 0.9%.
“While the market is consistently generating home price growth, sales activity is being hindered by a lack of inventory across many markets,” said Dr Frank Nothaft, chief economist for CoreLogic. “This tight inventory is also impacting the rental market where overall single-family rent inflation was 3.1% on a year-over-year basis in May of this year compared with May of last year.”
With rents outpacing inflation and wage increases, this will further restrict the ability of potential first-time buyers to save for their ever-increasing downpayment target.
