U.S. home prices increased 5.5 percent in July compared with July 2019, according to data released Tuesday.
That was the fastest growth in prices in nearly two years, caused by strong purchase demand, lower mortgage rates, and a further drop in the number of houses for sale, CoreLogic reported.
Because unemployment is expected to go up during the next year due to COVID-19, the increase in home prices is expected to slow down. That could lead to an increase in sales of distressed properties because some homeowners will not be able to pay their mortgages.
“The housing economy remains rock solid despite the shock of the pandemic,” said Frank Martell, CoreLogic’s president and chief executive officer, in a statement. “After a momentary COVID-19 induced blip, purchase demand has picked up, driven by low rates and millennial and investor buyers.
“We expect to see more home building in 2021 and beyond.”
In the Inland Empire, home prices – including distressed properties – were up 5.6 percent in July year-over-year, CoreLogic reported.