Home prices have been appreciating rapidly since the housing market’s recovery, but they’ve stepped off the fast track in recent months, displaying a notable slowdown in appreciation.
But CoreLogic predicts a turnaround thanks to low mortgage rates, which should spur strong home buying activity this spring and nudge home prices upward.
In February, home prices revealed a modest month-over-month increase of just 0.7% – an unusually slow start to the year, CoreLogic revealed.
“During the first two months of the year, home-price growth continued to decelerate,” said CoreLogic Chief Economist Frank Nothaft. “This is the opposite of what we saw the last two years when price growth accelerated early.”
On an annual basis the picture was slightly rosier, with a 4% increase over February 2018.
Here is a graph illustrating annual home-price growth, courtesy of CoreLogic:
While CoreLogic predicts home prices will backslide in March with a 0.5% decline, it expects things to pick up from there.
The data analytics provider forecasts a 4.7% jump in home-price growth from February 2019 to February 2020.
“With the Federal Reserve’s announcement to keep short-term interest rates where they are for the rest of the year, we expect mortgage rates to remain low and be a boost for the spring buying season,” Nothaft said. “A strong buying season could lead to a pickup in home-price growth later this year.”
Here is a chart of annual home-price growth by state, courtesy of CoreLogic: