According to CoreLogic, home prices surged to a new all-time high in April.
In April, home prices surged 20.9% annually, marking the 123rd month in a row, or more than 10 years, of annual home price gains. About 70% of homes sold above asking price during this year s spring homebuying season, according to the CoreLogic Home Price Index HPI.
The record growth in home prices is a result of a scarcity of for-sale inventory coupled with eager buyers who want to purchase before mortgage rates go higher, said Patrick Dodd, CoreLogic President and CEO. Most of the buyers who closed on their home in April had locked in their mortgage rate in February or March when rates were lower than today. Your credit score will be affected by visiting Credible to find out your personalized interest rate.
Home price growth is likely to slow down over the next year.
Home prices have gone up recently, but rising mortgage rates could cause this growth to slow down over the next year, according to CoreLogic's HPI Forecast. It predicted that as homebuyer demand slows in the coming months, annual home price appreciation will decrease to 5.6% by April 2023.
Mortgage rates went from being below 3% at points in April 2021 to more than 5% by the end of April this year, according to data from Freddie Mac. According to Realtor.com, mortgage payments have gone up by 55% for a median-priced home bought this year compared to a year ago because of higher mortgage rates. An extra $695 is added to monthly expenses.
With 30 year fixed mortgage rates much higher now, we expect to see waning buyer activity because of eroding affordability, Dodd said. Our forecast projects will slow down price growth over the next year. If you want to take advantage of today s rising home prices, consider getting a cash-out mortgage refinance to help you pay down debt or fund home renovation projects. You can compare and choose multiple mortgage lenders at once and choose one with the best interest rate.
These cities have seen the highest home price gains.
The average home value appreciation in the U.S. was 20.9% in April and 2.6% on a monthly basis, according to CoreLogic. The rate of home price growth varied depending on the housing market in individual metro areas.
Tampa, Fla., had the highest annual home price growth among the 20 largest metros in the U.S. in April, with 33.1% annual gains, according to the data from March. Phoenix came in second with a 29.7% annual gain.
On the other hand, home price growth was not much changed in New York, where it reached 9.8% annually. Flordia, Arizona and Tennessee saw the highest annual gains in April.
If home prices are surging in your area and you want to take cash from the rising value of your home, consider a cash-out refinance. If this is the right option for you, contact Credible to speak to a home loan expert and get all of your questions answered.
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