Speaking of resilience and markets doing just fine, CoreLogic just released its forecast for the year ahead, showing that it expects home prices to reach new peak values in 2020.
According to the CoreLogic Home Price Index Forecast, its U.S. home price index will rise 5.2% by December 2020.
At the end of 2019, on a month-over-month basis, prices increased by 0.3% in December. But home prices continue to increase on an annual basis — even if the monthly increases are slowing. The HPI forecast predicts an increase of just 0.1% from December 2019 to January 2020.
But even this little bump would mark a new peak in home prices since the last recorded peak in April 2006.
“Moderately priced homes are in high demand and short supply, pushing up values and eroding affordability for first-time buyers,” CoreLogic Chief EconomistFrank Nothaft said. “Homes that sold for 25% or more below the local median price experienced a 5.9% price gain in 2019, compared with a 3.7% gain for homes that sold for 25% or more above the median.”
According to the CoreLogic Market Condition Indicators, an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock, 34% of metropolitan areas have an overvalued housing market as of December 2019.
“On a national level, home prices are on an upswing,” CoreLogic President and CEO Frank Martell said. “Price growth is likely to accelerate in 2020. And while demand for homeownership has continued to increase for Millennials, particularly those in their 30s, 74% admit they have had to make significant financial sacrifices to afford a home. This could become an even bigger factor as home prices reach new heights during 2020.”