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 1.8% in May and 20.2% year over year. This was a slight decline from April which was 20.9%, but this almost matches the highest reading in the 45-year history of the index.

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 :

A Family

Advisors is a multi-state mortgage banker that believes in delivering a seamless, stress-free mortgage experience to all of our customers.

Apply Now