April home values rose by 5.4 percent year over year and 1.4 percent from the previous month, according to the latest data from CoreLogic.

April home values rose by 5.4 percent year-over-year and 1.4 percent from the previous month, according to the latest data from CoreLogic, an indication that a pandemic-induced drop in home value growth has not materialized.

The spike was caused in part by springtime buying and pent-up demand. Pre-pandemic factors such as low inventory and mortgage rates have also contributed to the growth in prices. Nonetheless, CoreLogic predicts growth will begin slowing soon, with a 1.3 percent drop forecasted by April 2021.

CoreLogic

“The very low inventory of homes for sale, coupled with homebuyers’ spur of record-low mortgage rates, will likely continue to support home price growth during the spring,” Dr. Frank Nothaft, chief economist at CoreLogic, said in a statement. “If unemployment remains elevated in early 2021, then we can expect home prices to soften. Our forecast has home prices down in 12 months across 41 states.”

After nine years of uninterrupted growth, home prices could fall for the first time in 2021. Some of the cities most likely to see declines include Prescott, Arizona; Huntington, West Virginia; Cape Coral-Fort Myers, Florida; and College Station-Bryan, Texas. Philadelphia, meanwhile, experienced much higher home price growth, 10.6 percent, in no small part due to the New Yorkers trying to move there in the wake of the pandemic.

CoreLogic

But even if home prices fall, it is not clear whether affordability will improve. While some are currently using low rates to secure lower monthly payments on both attached and single-family homes, low inventory and high levels of unemployment may push many out of buying a home.

“Tight supply and pent-up demand, particularly among millennials, provides optimism for a bounce-back in the housing market purchase activity and home prices over the medium term,” Frank Martell, president and CEO of CoreLogic, said in a prepared statement. “The next 12 to 18 months are going to be very tough times for the broader economy. As employment and economic activity begin to pick up, as it will surely do, we expect housing to be a driver in a national recovery.”

Email Veronika Bondarenko

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×