This isn't just a jump – it's the largest in 45 years
Annual home prices in the US soared 18% in July, according to data from CoreLogic released today.
The increase is the largest 12-month gain since the inception of the index 45 years ago, according to the report. The home price index also saw a 1.8% uptick from the previous month. In addition, home price appreciation of detached properties reached an all-time high of 19.7% – nearly double that of attached properties (11.6%).
Frank Martell, president and CEO of CoreLogic, noted that the market is ill-prepared for the millions of millennials who are now ready to purchase a home due to constricted supply and slugging housing construction of affordable homes.
“Home price appreciation continues to escalate as millennials entering their prime home-buying years, renters looking to escape skyrocketing rents and deep-pocketed investors drive demand,” said Martell said. “On the supply side, it is also the result of chronic underbuilding, especially of affordable stock. This lack of supply is unlikely to be resolved over the next five to 10 years without more aggressive incentives for builders to add new units.”
Read more: What’s happening with US housing starts?
CoreLogic expects home price growth to slow to a 2.7% pace by July 2022 “as ongoing affordability challenges deter some potential buyers and an expected uptick in new for-sale listings cause a slowdown in home price growth.”
“July’s annual home price growth was the most that we have ever seen in the 45-year history of the CoreLogic Home Price Index,” said Frank Nothaft, chief economist at CoreLogic. “This price gain has far exceeded income growth and eroded affordability. In the coming months, this will temper demand and lead to a slowing in price growth.”
