Real house prices decreased 0.3 percent between April 2020 and May 2020, according to the latest First American Real House Price Index (RHPI).
First American said real house prices declined 7.3 percent between May 2019 and May 2020. It said consumer house-buying power (how much one can buy based on changes in income and interest rates) increased 1.3 percent between April 2020 and May 2020, and increased 15.9 percent year-over-year.
“As the coronavirus pandemic continues to wreak havoc on global and domestic economies, housing has thus far proven resilient, managing a V-shaped recovery from the low point reached in April,” First American Chief Economist Mark Fleming said in a release. “The strong rebound is largely a result of two dynamics that existed before the pandemic and have continued or even gained strength in the last few months.”
Fleming said falling mortgage rates and demand from millennials aging into their prime homeownership years have boosted demand.
“However, another key trend has also strengthened amid the pandemic – an already tight inventory of homes has now reached record low levels and continues to move lower,” Fleming said. “The housing market amid the pandemic faces a significant supply and demand imbalance, and the result is accelerating price appreciation. In fact, based on current trends, we expect house price appreciation nationally to remain strong, and even accelerate in many markets this summer.”
According to the index, the five states with the greatest year-over-year increase in the RHPI were Vermont (6.7 percent); Oklahoma (3.7 percent); Montana (3.5 percent); Texas (3.2 percent); and Georgia (2.8 percent).
The five states with the greatest year-over-year decrease in the RHPI were Louisiana (11.5 percent); New Hampshire (9.5 percent); West Virginia (9.3 percent); South Dakota (7.7 percent); and New Jersey (7.5 percent).
First American said the five metropolitan markets with the greatest year-over-year increase in the RHPI were New York (14.8 percent); San Diego (10.1 percent); Pittsburgh (8.8 percent); Orlando (6.3 percent); and St. Louis (5.4 percent).
The five markets with the greatest year-over-year decrease in the RHPI were Las Vegas (24.5 percent); Providence, R.I. (14.1 percent); Boston (7.5 percent); Chicago (7.4 percent); and Cleveland (7.3 percent).