Multi-Generational Demand: US Home Prices Post Third Month of Double-Digit Growth in April, CoreLogic Reports
- CoreLogic Home Price Index recorded a 13% annual gain, the highest since February 2006
- Limited inventories discourage potential sellers, further exacerbating inventory and affordability challenges
CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, released the CoreLogic Home Price Index (HPI™) and HPI Forecast™ for April 2021.
Sparse inventory and high demand continues to place upward pressure on home prices, creating challenges across generations as buyer preferences shift. Younger millennials continue to enter the market in droves while older millennials look to upgrade and upsize their homes. In a recent CoreLogic consumer survey, the need for more space was noted as the top driver (64%) for demand among these cohorts.
The increased competition among buyers may cause a ripple effect and create affordability challenges for baby boomers interested in downsizing or relocating. Notably, 72% of this cohort list the desire for a new location as the main reason for wanting to purchase a new home. However, in response to rising prices, baby boomers — who own 54% of the nation’s homes — may wait to sell, creating further inventory pressures for older millennials seeking move up-purchases.
“As older homeowners become more comfortable with listing their homes, they are faced with the reality that if they sell, they may get a smaller home for the same price as what they already have,” said Frank Martell, president and CEO of CoreLogic. “Rather than decreasing their financial burden and cashing out equity to support their retirement, baby boomers may choose to stay put — which could exacerbate inventory challenges.”
Top Takeaways:
- Nationally, home prices increased 13% in April 2021, compared with April 2020. On a month-over-month basis, home prices increased by 2.1% compared to March 2021.
- Appreciation of detached properties (14.7%) was more than double that of attached properties (7.2%) in April as prospective buyers continue to seek out more space.
- Home prices are projected to increase 2.8% by April 2022, as affordability and supply challenges drive potential buyers out of the market, causing a slowdown in home price growth.
- In April, home prices rose sharply in the west with Coeur d’Alene, Idaho, experiencing the highest year-over-year increase at 31.4%. Boise City, Idaho, ranked second with a year-over-year increase of 28.6%.
- At the state level, Idaho and Arizona continued to have the strongest price growth at 27.2% and 20.4%, respectively. South Dakota also had a 19.3% year-over-year increase as new home buyers seek out more affordable options, space and low property taxes.
“Baby boomers are staying in their homes longer, slowing the pace with which existing homes come on the for-sale market,” said Dr. Frank Nothaft, chief economist at CoreLogic. “Owner occupants today have been in their homes for a median of 13 years, about 50% longer than the previous generation.”
About CoreLogic
CoreLogic (NYSE: CLGX), the leading provider of property insights and solutions, promotes a healthy housing market and thriving communities. Through its enhanced property data solutions, services and technologies, CoreLogic enables real estate professionals, financial institutions, insurance carriers, government agencies and other housing market participants to help millions of people find, buy and protect their homes. For more information, please visit www.corelogic.com.
