Falling Interest Rates May Push Up Home Prices

April 3, 2019
new home sales
Photo: Unsplash/Brian Babb

After months of slowing growth, CoreLogic predicts that annual gains in home prices could rise again to 5 percent by 2020.

This rate would still be lower than last spring, when the U.S. saw an annual gain of around 7 percent. But it would be a turn around from the recent slowdown in price gains, which put February’s growth rate at just 4 percent. According to CNBC, the rise would likely be due to falling interest rates.

The prediction comes just as affordability has improved. Roughly 40 percent of the nation’s 50 largest housing markets are now considered overvalued (CoreLogic categorizes a market as overvalued when home prices are at least 10 percent above the long-term, sustainable level). Last February, 48 percent were considered overvalued. Researchers say that share could jump again.

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