Home prices increased in January and will even continue this rise into January 2018 due to a mixture of low housing supply and a progressive economic recovery, according to CoreLogic, a property information, analytics and data-enabled solutions provider.
CoreLogic released its Home Price Index and its HPI Forecast for January, which showed that home prices increased 6.9% from January 2016 and 0.7% from December.
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As the chart shows, home prices climbed rapidly after the Great Recession, but have been relatively level since mid-2014. This year, however, saw a slight change to the status quo as the graph shows the slight upward movement in January 2017.
“With lean for-sale inventories and low rental vacancy rates, many markets have seen housing prices outpace inflation,” CoreLogic Chief Economist Frank Nothaft said. “Over the 12 months through January of this year, the CoreLogic Home Price Index recorded a 6.9% rise in home prices nationally and the CoreLogic Single-Family Rental Index was up 2.7%–both rising faster than inflation.”
The HPI Forecast indicates this growth won’t be stopping anytime soon. The forecast predicts home prices will increase 4.8% annually in January 2018 and 0.1% from January to February this year.
“Home prices continue to climb across the nation, and the spring home buying season is shaping up to be one of the strongest in recent memory,” CoreLogic President and CEO Frank Martell said.
“A potent mix of progressive economic recovery, demographics, tight housing stocks and continued low mortgage rates are expected to support this robust market outlook for the foreseeable future,” Martell said. “We expect the CoreLogic Home Price Index to rise 4.8% nationally over the next 12 months, buoyed by lack of supply and continued high demand.”
The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.
However, other experts insist that this increase in home prices is due to a lack of housing supply, and that this type of increase is unsustainable.