Feeble home sales pump brakes on accelerating home prices
Weak home sales put a speed bump in the way of accelerating house values as price growth slowed to a pace not seen since the start of the decade, according to CoreLogic.
Property values increased 3.4% in June from a year ago and ticked up 0.4% from May.
"Tepid home sales have caused home prices to rise at the slowest pace for the first half of a year since 2011. Price growth continues to be faster for lower-priced homes, as first-time buyers and investors are both actively seeking entry-level homes. With incomes up and current mortgage rates about 0.8 percentage points below what they were one year ago, home sales should have a better sales pace in the second half of 2019 than a year earlier, leading to a quickening in price growth over the next year," Frank Nothaft, chief economist at CoreLogic, said in a press release.
By this time next year, home prices should be up 5.2%, according to CoreLogic projections.
Despite a slowdown in property value appreciation, affordable housing stock is still tight, and stopping some potential homeowners from entering the market. About 71% of millennials, the largest cohort of homebuyers, are confident they'd qualify for a mortgage, though only 37% claim houses are affordable in their local market.
"Millennial homebuyers are no longer a trend on the industry horizon. In fact, they are the new, first-time homebuyers of today. However, only about half of recent millennial buyers were satisfied with the number of options of available homes in their market or price range," said CoreLogic President and CEO Frank Martell. "Affordable housing continues to be a growing issue. A deeper look at the data shows that 43% of those surveyed indicated they couldn't afford to buy a new home or are concerned they won’t be able to."