After a surge in sales the first two months of the year, home prices jumped in March before the coronavirus took hold in the United States.
An analysis released Tuesday by analytics firm CoreLogic found that home prices nationally increased 4.5 percent over March 2019 and 1.3 percent over the month before.
The increase, however, is expected to slow considerably. The firm’s Home Price Index calls for annual price growth of 0.5 percent between March 2020 and March 2021 – and a 0.6 percent increase in April over March levels.
“Home prices for March reflect transactions negotiated primarily in the previous two months, prior to the implementation of the shelter-in-place policies. Rapid decline of purchase activity starting in the middle of March can be seen in other CoreLogic data and is consistent with our HPI forecast of slowing price growth in April,” said Dr. Frank Nothaft, chief economist at CoreLogic.
The analysis also found:
- Closed home sales fell 26 percent in the last two weeks of March as the economy officially entered a recession.
- The nationwide HPI for condos and duplexes increased by 3.8 percent year over year in March 2020.
- Single-family home increased in March by 4.7 percent year over year.
“The CoreLogic U.S. Home Price Index is predicted to remain largely unchanged over the next year or so after a long uninterrupted run of appreciation,” said Frank Martell, president and CEO of CoreLogic. “Although the economic fallout from lockdown orders, put in place to fight the spread of COVID-19, will be profound, the basic supports for a rebound in home purchase activity remain in place. Once the shelter-in-place policies are lifted, we expect millennials, who submitted home-purchase applications well into the crisis, to lead the way back to a positive, purchase-driven housing cycle.”