Real house prices increased 0.1 percent between December 2019 and January 2020, according to the latest First American Real House Price Index (RHPI).
On a yearly basis, real house prices declined 3.8 percent between January 2019 and January 2020, the RHPI found.
“As we are all too aware, the coronavirus outbreak has taken hold of the domestic and global economy. The housing market is not immune to its impact but may be in a better position than many believe,” First American Chief Economist Mark Fleming said in a release.
“Recent data shows that weekly unemployment claims soared to a record, which will, in turn, work to depress household incomes and consumer confidence,” Fleming said. “While mortgage rates have fallen due to the economic uncertainty, potential home buyers that are confined to their homes cannot necessarily take advantage of the affordability boost.”
According to the RHPI, consumer house-buying power (how much one can buy based on changes in income and interest rates) increased 1.4 percent between December 2019 and January 2020, and increased 13.2 percent year-over-year.
Median household income has increased 2.3 percent since January 2019 and 59 percent since January 2000; real house prices are 17.2 percent less expensive than in January 2000.
“Many still bear scars from the Great Recession and may expect the housing market to follow a similar trajectory in response to the coronavirus outbreak,” Fleming said. “But, there are distinct differences that indicate the housing market may follow a much different path. While housing led the recession in 2008-2009, this time it may be poised to bring us out of it.”
During January, the only two states with a year-over-year increase in the RHPI were New Jersey (+2.7 percent) and Ohio (+0.2 percent). The five states with the greatest year-over-year decrease in the RHPI in January were Utah (-7.5 percent); New Mexico (-7.2 percent); Colorado (-7.2 percent); California (-6.7 percent); and Mississippi (-6.7 percent).