Same story, new month. Home prices are on the move again, according to CoreLogic, which recently reported a 13% increase to home appreciation.
The good news follows multiple months of double-digit gains. In fact, April’s rate was the largest year-to-year increase since 2006.
Low inventory and sustained buyer demand are two big reasons why home prices continue to move upward. The conditions are not ideal for new homebuyers, including a wave of millennials eager to enter the market.
A consumer survey showed that about 65% of older and younger millennials are hoping to move into a larger space. At the same time, a large representation of baby boomers is waiting to sell. Yet, the survey also revealed that baby boomers do want to move somewhere new. With little movement from potential sellers, the market’s inventory will further dwindle and home prices will follow their current path.
A new reality may also be playing a role. Today’s homeowners, by and large, choose to live in their homes for a longer period of time than before. Historically, people stayed put for about eight years. In 2021, the median amount of time they stay is 13 years, a dramatic generational increase of 50%.
The pandemic also shifted people’s housing preferences and the statistics are showing it. For example, the extent of home appreciation growth was smaller in attached properties. Urban residential hubs also saw occupancy declines as people worked from home or sought spacious living.
Unfortunately, as home affordability shrinks, some potential buyers will be sidelined even as price growth slows down. CoreLogic projects that home price growth will fall back to earth sometime in the spring of 2022.
Timing can be everything in the real estate market. If you’re thinking about where you fit in, you can count on Mortgage Squad to shine a bright light on today’s market so you can make the right decisions and reach your financial goals. Our lending experts can assist you with your next big purchase.
With such an active market, we won’t let the process weigh you down either. Our team will work hard on your behalf so you’re always up to speed and ready for the next step and next adventure.