×
The email you entered is not valid.
Economy, Real Estate

U.S. Home Price Forecast Remains Positive

Source: https://www.corelogic.com/blog/2020/11/u.s.-home-price-forecast-remains-positive.aspx

  • Pending Sales suggest housing activity will continue to exceed last year levels in the near term
  • U.S. home price growth expected to slow over the next year, but remain positive
  • 40 metropolitan areas across the country are expected to see price decline over the next year

Following the temporary housing market freeze during April’s nation-wide shutdowns, national sales of homes during the summer outpaced last year’s levels with September sales averaging 10% higher compared to last September. And according to the latest home buying contracts signed, also known as Pending Sales, the positive trend is expected to continue in the autumn.

Figure 1: Weekly MLS Contract Signings & Closings

The combination of strong home buying demand amid very low inventory of homes for sale ensured home prices held up strong. In August, the CoreLogic Home Price Index reported a 5.9 percent gain in home prices compared to last August. Looking forward, the CoreLogic Home Price Index Forecast predicts home price growth will slow over the next year but still remain positive nationally.

Figure 2: Home Price Growth Forecasted to Slow but Remain Positive

Still, there are metropolitan areas that are likely to experience home price declines over the next 12 months as their economies rely more heavily on sectors that have been hard hit by the pandemic such as travel, entertainment, hospitality and retail, but gas and mining as well. Higher unemployment in those areas will limit the pool of potential home buyers and reduce the pressure on home prices.

According to the August 2020 CoreLogic Market Risk Indicators, 40 out of 392 metropolitan areas have a probability of 65 percent or higher of seeing lower home prices next August than they are today. To determine vulnerability of metro areas to price decline, CoreLogic’s probability model considers many data points at a state and metro level including unemployment rates, income, distressed loans, new construction and a few others.

The 40 metro areas with high risk of price decline over the following 12 months are mostly located in the Northeast, West and Southern regions. Florida and Michigan stand out with each having 6 metro areas with elevated risk of price decline, followed by Nevada, Texas and New Jersey – each with 3 metro areas. Given that Nevada has the highest unemployment rate of any state in August, 13.2%, it has the largest expected price decline over the next year, forecasted to fall by 6.1 percent through August 2021.

Figure 3: Areas at High Risk of Price Decline Concentrated in Few States

To learn more about the data behind this article and what CoreLogic has to offer, visit https://www.corelogic.com/.

GET WEEKLY ALERTS

Sign up to receive our stories in your inbox.

The email you entered is not valid.

LET US HELP

Data is changing the speed of business. Investors, Corporations, and Governments are buying new, differentiated data to gain visibility make better decisions. Don't fall behind. Let us help.

DATA PROVIDER SPOTLIGHT

Placer

Placer.ai provides retailers with actionable location-based insights into their audience and competition. With unprecedented visibility into humanity-in-action, every retailer can be brilliant at running their business.

Retailers make critical decisions every day whilst in the dark. They do not have answers to seemingly simple questions: Who visits my store? Where do they live, or work? What other locations do they frequent? What’s my churn rate? Where do those lost customers go? What are my competitors up to? And ultimately, how should I deploy my limited resources to grow my business?

Placer.ai provides instant access to location insights derived from the foot traffic of millions of consumers, delivering visibility into offline behavior. We shed light into churn, trade areas, untapped audiences, out-of-store behavior, and competitive benchmarking.

GET WEEKLY ALERTS

Sign up to receive our stories in your inbox.

The email you entered is not valid.

LET US HELP

Data is changing the speed of business. Investors, Corporations, and Governments are buying new, differentiated data to gain visibility make better decisions. Don't fall behind. Let us help.

DATA PROVIDER SPOTLIGHT

Placer

Placer.ai provides retailers with actionable location-based insights into their audience and competition. With unprecedented visibility into humanity-in-action, every retailer can be brilliant at running their business.

Retailers make critical decisions every day whilst in the dark. They do not have answers to seemingly simple questions: Who visits my store? Where do they live, or work? What other locations do they frequent? What’s my churn rate? Where do those lost customers go? What are my competitors up to? And ultimately, how should I deploy my limited resources to grow my business?

Placer.ai provides instant access to location insights derived from the foot traffic of millions of consumers, delivering visibility into offline behavior. We shed light into churn, trade areas, untapped audiences, out-of-store behavior, and competitive benchmarking.