Home prices continue to rise

A new report shows that home prices continue to rise, as they saw an increase of 2.1 percent from February 2016 to March 2016, and an increase of 6.7 percent when comparing March 2016 with March 2015.

The CoreLogic HPI Forecast predicts that home prices will continue to rise. On a month-to-month basis, April’s prices are expected to grow 0.7 percent. An increase of 5.3 percent in prices is expected from March 2016 to March 2017.

“Housing helped keep U.S. economic growth afloat in the first quarter of 2016 as residential investment recorded its strongest gain since the end of 2012,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Low interest rates and increased home building suggest that housing will continue to be a growth driver.”

“Home prices reached the bottom five years ago, and since then have appreciated almost 40 percent,” added Anand Nallathambi, president and CEO of CoreLogic.

This goes hand-in-hand with a recent report from the National Association of Realtors®, who found that home prices saw an increase in 87 percent in the first quarter in 87 percent of U.S. metropolitan areas.

Limited inventory is continuing to drive prices up. Compared to March 2016, homes for sale were down 1.5 percent to 1.98 million homes on the market. The national median home price is up to $217,600, an increase of 6.3 percent, compared to the first quarter of 2015, when the median was $204,700.

The national median existing single-family home price in the first quarter was $217,600, up 6.3 percent from the first quarter of 2015 ($204,700). The median price during the fourth quarter of 2015 increased 6.7 percent from the fourth quarter of 2014.

“In spite of deficient supply levels, stock market volatility and the paltry economic growth seen so far this year, the housing market did show resilience and had its best first quarter of existing-sales since 2007 (5.66 million),” said Lawrence Yun, NAR chief economist. “The demand for buying is there, but unless the stock of new and existing-homes for sale increases significantly – especially in several markets in the West – the housing market will struggle to reach its full potential.”