National Home Prices Jump 17.2% YOY in June

National home prices were up 17.2%, year over year in June, the highest yearly increase since 1979, according to the latest CoreLogic Home Price Index Report.

CoreLogic said the increase in home prices was fueled by low mortgage rates, low for-sale supply and a rebounding economy.

Looking ahead, the firm cautioned prices could taper off in the next 12 months as prices become out of reach for some buyers along with projected increases in for-sale supply and moderation in demand.

For the moment, though, appreciation of detached properties (19.1%) was almost double that of attached properties (10.7%) in June as prospective buyers continue to seek out more space.

The West saw the biggest year over year gains with Idaho up a yearly 34.2% in June followed by Arizona with 26.1%. At the low end among states, New York saw home prices increase 6%, and 6.3% in North Dakota. All states saw appreciation.

The high prices are keeping some people out of the market. In early July CoreLogic President and CEO Frank Martell noted younger and first-time buyers, including younger millennials, are faced with the challenge of having sufficient savings for a down payment, closing costs and cash reserves.

And while CoreLogic predicts the market will come down from its record peaks later this year, other signs point to continued activity.

Earlier this summer, for example, Freddie Mac predicted the frenzy in the home market will remain strong for some time.

“The low mortgage rates that have supported the housing market throughout the pandemic are expected to increase later in the year, but just gradually,” said the latest quarterly report from the GSE.

In addition to low mortgage rates, the market is being propelled by disposable after-tax income that has risen during the current recession and a major shortage of housing supply relative to the population, Sam Khater, Freddie Mac’s Chief Economist stressed.