Nearly a decade of continuous home-price growth may be coming to an end soon thanks to the economic impacts of COVID-19.
While national home prices posted a 4.8% year-over-year growth in May, they are predicted to tumble 6.6% by May 2021, according to a the CoreLogic Home Price Index (HPI) report, released Tuesday. That drop, should it happen, will be the first annual decrease in home prices in more than nine years.
“The HPI has gained on a year-over-year basis every month since February 2012 and has gained 68.3% since hitting bottom in March 2011,” said Molly Boesel, principal economist in CoreLogic’s Office of the Chief Economist.
In May, the overall HPI was 13.3% above its pre-crisis peak in April 2006. However, CoreLogic predicted that the market’s days of consistent price gains are numbered.
The downturn will be driven by the economic fallout from the coronavirus pandemic, and is expected to be nationwide, Boesel said in the report.
“Prices in all states are forecast to decrease over the next year as the country continues to grapple with the coronavirus pandemic, with the largest decrease predicted to occur in Nevada with a year-over-year drop of 18.6%,” she said.