Home prices in May are up both monthly and annually, according to the Home Price Index and HPI Forecast released today by CoreLogic.
Overall, home prices, including distressed sales, increased by 5.9% from last year, and 1.6% from April, according to the CoreLogic HPI.
"Housing remained an oasis of stability in May with home prices rising year over year between 5% and 6% for 22 consecutive months," CoreLogic Chief Economist Frank Nothaft said. "The consistently solid growth in home prices has been driven by the highest resale activity in nine years and a still-tight housing inventory."
It does not seem like the demand will let up any time soon, as the industry continues to predict that mortgage rates will drop still further. In the wake of the United Kingdom’s shocking decision to leave the European Union, experts throughout the U.S. housing industry weighed in on the potential impact of the Brexit.
The general consensus among those experts is that mortgage interest rates will go down, but just how low? Here's the prediction from Fitch Ratings.
“CoreLogic reported a strong rise in house prices in May, in line with the recent run of solid gains,” Capital Economics Property Economist Matthew Pointon said. “With mortgage rates now likely to stay close to record lows for longer, house prices will continue to come under upwards pressure.”
The HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. The values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.
The HPI Forecast showed that prices will increase by 5.3% annually by May 2017, and by 0.8% month-over-month in June 2016.
Last month, CoreLogic predicted that on a month-over-month basis home prices were expected to increase 0.9% from April 2016 to May 2016, but home prices actually increased 1.6%.
"Price appreciation continues to be fairly broad-based across the U.S. From a regional perspective, the Pacific Northwest continues to be the hottest area for home-price growth, with Oregon and Washington leading the way," CoreLogic president and CEO Anand Nallathambi said.
"The recent turbulence in financial markets should lead to modestly lower mortgage rates, which will provide even more support to the steadily improving real estate recovery," Nallathambi said.
This chart shows the HPI change each year:
Click to Enlarge
(Source: CoreLogic)
