Home prices are not done setting records. CoreLogic released its January Home Price Index (HPI) Report This Week in Real Estate that showed the HPI gain was the largest 12-month growth since the index’s inception in 1976. Additionally, home prices were pushed to the highest level recorded in the 45-year history of the HPI. And, according to Realtor.com, the median list price set a record high in February. Below are a few newsworthy events from the first week of March that influence our business:
Home Price Increases Reach New High In The New Year. National home prices increased 19.1% year over year in January 2022, according to the latest CoreLogic Home Price Index (HPI®) Report. The January 2022 HPI gain was the highest 12-month growth in the U.S. index since the series began in 1976. While home price growth is expected to slow over the next 12 months, the CoreLogic HPI Forecast shows that the year-over-year change in the HPI will remain in the double digits for at least the first seven months of 2022. Despite a low supply of properties for sale and rising home prices, U.S. homebuyers remained enthusiastic in January 2022, pushing home prices to the highest level recorded in the 45-year history of the HPI. Home seekers are still optimistic about the market, with more expecting to buy over the next six months as appreciation is forecast to slow.
Rates Drop Amid Russia-Ukraine Conflict. Mortgage rates fell again this week amid Russia’s invasion of Ukraine, sparking uncertainty across the globe including in U.S. markets. During large-scale disruptions, investors often flee to safer options, such as U.S. Treasury notes, bonds and mortgage-backed securities. All things being equal, that dynamic tends to put downward pressure on mortgage rates. The 30-year fixed-rate mortgage dropped to a 3.76% average this week, Freddie Mac reports. “Geopolitical tensions caused U.S. Treasury yields to recede this week as investors moved to the safety of bonds, leading to a drop in mortgage rates,” says Sam Khater, Freddie Mac’s chief economist. “While inflationary pressures remain, the cascading impacts of the war in Ukraine have created market uncertainty. Consequently, rates are expected to stay low in the short term but will likely increase in the coming months.” Nadia Evangelou, NAR’s senior economist and director of forecasting, wrote on the association’s blog that rates likely will rise soon as the Fed remains on course to raise its short-term interest rates in order to control inflation.
Home Prices Set Records Ahead Of Spring Buying. Spring may have sprung early in the housing market. The U.S. median list price set a record high in February, according to realtor.com’s Monthly Housing Trends Report. Many markets continued to post double-digit annual price gains. “Over the last five years, we have seen home prices break records early in the season as buyers try to get ahead of the competition,” says Danielle Hale, realtor.com’s chief economist. “But this is the first time the record has been broken in February, signaling that competition is already heating up weeks before the start of the spring buying season in a typical year.” The number of homes for sale remains at record lows. But home buyer demand remains high and home prices are surging as a result of competition for low housing inventories. Hale says a slight improvement has been made on the inventory front: February saw declines in new listings improve for the first time since November 2021. “Whether inventory continues to improve will depend on a variety of economic and geopolitical factors, including the conflict in Ukraine and mortgage rate hikes, which haven’t impacted home sales or price growth so far, but will increasingly lessen buyers’ purchasing power,” she says.
Did you know every home listed for sale with Berkshire Hathaway HomeServices Northwest Real Estate and Berkshire Hathaway HomeServices Real Estate Professionals is eligible to receive no-obligation home warranty coverage from American Home Shield the first six months the home is listed with our company?