U.S. home prices were 6.6% higher in May 2017 than the same point in 2016, pulling home equity up along with it.
“For current homeowners, the strong run-up in prices has boosted home equity and, in some cases, spending,” said Frank Martell, the president and CEO of real-estate research firm CoreLogic, in its latest report on nationwide home price trends.
The list of states that saw the biggest gains in CoreLogic’s Home Price Index — a proprietary metric that takes into account various single-family home price factors — should be familiar to RMD readers who follow equity trends: Washington State home prices jumped 12.6% year-over-year, followed by Utah with 10.4% and Colorado at 9.7%.
Those states have frequently topped recent lists of states with the greatest home equity gains, and have also generated significant Home Equity Conversion Mortgage growth: As RMD reported yesterday, reverse mortgage endorsements in Colorado between January and April 2017 are running 69% higher than at the same point in 2016, while Washington and Oregon saw jumps of more than 30% each during that span.
Denver also claimed the top spot among metropolitan areas, with 9.2% year-over-year home price growth. Las Vegas, San Diego, Los Angeles, and Boston rounded out the top five.
“The market remained robust with home sales and prices continuing to increase steadily in May,” CoreLogic chief economist Frank Nothaft said in the report. “While the market is consistently generating home-price growth, sales activity is being hindered by a lack of inventory across many markets.”
Though these trends generally spell good news for homeowners and those potentially looking into tapping home equity in retirement, the same forces work against renters and first-time homebuyers, CoreLogic noted: Rents for affordable housing units are rising significantly faster than inflation, and new buyers are facing higher-than-expected sticker prices.
Read CoreLogic’s full report here.
Written by Alex Spanko