According to CoreLogic’s latest Home Price Index, prices appreciated by 6.9% year-over-year from December 2016 to December 2017 on a national level. This marks the fifth month in a row with at least a 6.9% increase.

Dr. Frank Nothaft, Chief Economist for CoreLogic, gave insight into the reason behind the large appreciation,

“The number of homes for sale has remained very low. Job growth lowered the unemployment rate to 4.1 percent by year’s end, the lowest level in 17 years. Rising income and consumer confidence has increased the number of prospective homebuyers. The net result of rising demand and limited for-sale inventory is a continued appreciation in home prices.”

This is great news for homeowners who have gained nearly $15,000 in equity (on average) in their homes over the last year! Those homeowners who had been on the fence as to whether or not to sell will be pleasantly surprised to find out that they now have an even larger profit to help cover a down payment on their dream homes.

As we near the traditionally busy spring buyers season, there is still hope for buyers as mortgage rates remain low compared to recent decades. The report also predicted that home price appreciation will slow slightly, rising by 4.3% by this time next year.

What impact will rising rates have on house values?

Many quickly jump to the conclusion that an increase in mortgage rates will have a detrimental impact on real estate prices as fewer buyers will be able to qualify for a loan. This seems logical; if there is less demand for housing then prices will drop.

However, in a good economy, rising mortgage rates increase demand as many prospective purchasers immediately jump off the fence to guarantee they get the lower rate.

What this means for you

If you are looking to enter the housing market, as either a buyer or a seller, let’s get together to go over exactly what’s going on in our neighborhood and discuss your options!