Home prices continue to grow on both a year-over-year and month-over-month basis, according to the CoreLogic Home Price Report for May.
Nationwide, home prices are up 6.6 percent in May 2017 compared to May 2016. May home prices increased by 1.2 percent compared to April 2017. In the Chicago-Naperville-Arlington Heights metro area, single-family home prices increased by 4.4 percent on a year-over-year.
Source: CoreLogic May 2017
This is good news for current homeowners and anyone looking to sell. However, many homeowners aren’t selling, which is causing a lack of inventory and driving up home prices.
“For current homeowners, the strong run-up in prices has boosted home equity and, in some cases, spending,” said Frank Martell, president and CEO of CoreLogic. “For renters and potential first-time homebuyers, it is not such a pretty picture. With price appreciation and rental inflation outstripping income growth, affordability is destined to become a bigger issue in most markets.”
The CoreLogic Home Price Index forecast estimates that home prices will continue to increase in the upcoming year, with a 5.3 percent year-over-year increase from May 2017 to May 2018. On a month-to-month basis, home prices are expected to increase by 0.9 percent.
“While the market is consistently generating home price growth, sales activity is being hindered by a lack of inventory across many markets,” said Dr. Frank Nothaft, chief economist for CoreLogic. “This tight inventory is also impacting the rental market where overall single-family rent inflation was 3.1 percent on a year-over-year basis in May of this year compared with May of last year.”