When looking at their forecasts, CoreLogic has largely been off on their predictions. When you take a look at what they forecasted for May they were anticipating a 1.2% reading in that month. However, what we actually saw was 1.8%. Looking at their report from last year this time, they forecasted that home prices would increase by 3.4%, but last week they reported that prices rose by over 20%.
CoreLogic is forecasting that home prices will appreciate by 1% in June and 5% in the year going forward. Because they seem to be very conservative, it will probably underestimate actual appreciation. Let’s for a moment say they wind up being correct and we see closer to 5% appreciation. This would still be extremely meaningful for 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.
Source : https://bit.ly/3NSckOC
By: Jon Iacono