U.S. home prices continue to climb, edging up 1.6% from March to April and rising 6.9% year-over-year, according to the latest CoreLogic Home Price Index.
CoreLogic estimates home prices will increase 5.1% by April 2018, reflecting a slow but steady rise in home-price growth predictions from the beginning of the year. The index expects home prices to increase 0.7% from April 2017 to May 2017.
Seven states saw home prices climb above the national rate year-over-year in April: Colorado (8.8%), Michigan (8.7%), New York (7.2%), Oregon (9.1%), Utah (10.1%), Washington (12%) and Wisconsin (7%) — the same number as in March.
Home-price growth is continuing its upward trend as high demand drives tight competition for limited inventory, according to CoreLogic. The latest S&P CoreLogic Case-Shiller U.S. National Home Price Index showed that home prices reached a 33-month high in March, up 1.3% from the previous market peak in June 2006 and 39.5% ahead of the last market trough in 2012.
The price growth has some sellers wary. As a result, many are listing their homes at lower prices, either to speed up the sales process or because the market's rapid inflation has made price-setting difficult. According to Trulia, one in 10 for-sale homes in the U.S. saw price cuts from May 2016 to April 2017, and those cuts edged up in 69 of the nation's top markets in 2017.
The market continues to feel the burn of home-price growth, with new-, existing- and pending home sales down in April. Still, a modest lift in April's single-family housing starts and an increase in builder optimism for future business opportunities reported in May could point to much-needed inventory growth in the coming months. A lag in the month's single- and multifamily permits, however, has some industry observers worried about further sluggishness in new construction activity and heightened competition for buyers.