Home Appreciation Continues

Last week CoreLogic released their Home Price Index (HPI). The CoreLogic HPI is designed to provide an early indication of home price trends. The report is published monthly with coverage at the national, state, and Core Based Statistical Area (CBSA). The report showed that home prices rose by 2.6% in April and 20.9% year over year. This was almost in line with March’s number and matched the highest reading in the 45-year history of the index. CoreLogic estimated that 70% of homes sold above the asking price during the spring season.

CoreLogic is forecasting home prices to appreciate 1.2% in May and 5.6% moving forward for the rest of this year. This would be a slight decrease from almost 6% in the previous report and a little behind most other forecasts. However, even if CoreLogic is correct and we see closer to 5% appreciation, this is still very supportive of home pricing. This could also be very beneficial to wealth creation. For example, if you were to purchase a $400,000 home and put down 10% or $40,000 you would gain $20,000 in appreciation over the next year, earning you a 50% return on your investment.

There may be pockets of locations that deviate from these national numbers, but this report and many other reports establish that it is evident that the housing market continues to be resilient and is still very hot.