Home prices gain speed; experts predict even more increases in the coming months

Higher home prices

Americans who are on the fence about buying a home might want to act soon. Home prices just notched their first growth spurt in over a year, and according to some experts, they’re only going to rise from there.

Demand drives prices up

According to the recent Home Price Index from CoreLogic, April saw home prices rise 3.6 percent over the year, marking the first time the price appreciation rate has jumped since March 2018. Frank Nothaft, CoreLogic’s chief economist, says falling mortgage rates are the likely culprit, improving affordability and causing a surge in demand.

Some of the biggest jumps in home prices were seen in the Las Vegas area, where they rose 7.6 percent over the year, and Denver, where they jumped nearly 4 percent.

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At the state level, Idaho home prices experienced the biggest jump with an increase of over 10 percent. Arizona and Indiana rounded out the top three.

More to come

Unfortunately, the turnaround for home prices probably wasn’t a blip on the radar. According to Mark Fleming, chief economist at First American, they’re probably going to continue rising.

“That was the situation in April, but this is now June, and mortgage rates have fallen even further,” Fleming said. “The 30-year, fixed-rate mortgage averaged 3.99 percent in the last week of May – a level last seen in January 2018. That means that consumer house-buying power has only strengthened more since April.”

Rates have fallen even more since May, averaging 3.84 percent last week according to Freddie Mac.

According to Fleming, “The signal from the housing market indicates another turn of housing market events and a greater likelihood of faster price appreciation.”

Altogether, CoreLogic’s economists forecast a 4.7-percent rise in home prices by April 2020.

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