Home prices surged another 20% annually in February, according to new CoreLogic data, hitting another new series high and marking 12 consecutive months of double-digit gains.
Annual home price growth continues to hit new highs, according to the CoreLogic Home Price Index (HPI). At the state level, the highest annual increases were seen in the Sunshine State of Florida, followed by Arizona and Nevada. In fact, CoreLogic said that no state across the country saw annual home prices drop in February.
"New listings have not kept up with the large number of families looking to buy, leading to homes selling quickly and often above list price," CoreLogic Chief Economist Frank Nothaft said. "This imbalance between an insufficient number of owners looking to sell relative to buyers searching for a home has led to the record appreciation of the past 12 months."
Homeowners can take advantage of increasing home prices in the current housing market by tapping into their home's equity through a cash-out refinance. Visit Credible to find your personalized interest rate without affecting your credit score.
Home price growth to slow in year ahead, CoreLogic says
CoreLogic forecasts that home prices in the U.S. will increase year-over-year by 5% over the next 12 months, but adds that rising interest rates will continue to sideline more homebuyers.
"Higher prices and mortgage rates erode buyer affordability and should dampen demand in coming months, leading to the moderation in price growth in our forecast," Nothaft said.
Interest rates are also expected to continue rising over the next two years as the Federal Reserve fights to combat rising inflation. The Fed is now considering raising rates up to three times in 2022, and recently raised rates for the first time since 2018. In fact, Treasury Secretary Janet Yellen said during a recent interview that consumers are likely to see "uncomfortably high" inflation numbers over the course of the next year.
Today’s average rate for a 30-year mortgage is averaging just under 5%, according to the latest data from Freddie Mac. If you want to take advantage of the rising value of your home, consider a cash-out refinance. Visit Credible to compare multiple lenders at once and choose the one with the best mortgage rate for you.
How homeowners can take advantage of rising prices
As home prices surge, homeowners can take advantage of their homes' value in several ways. A cash-out refinance, for example, allows homeowners to tap into the equity on their home, and possibly get low interest rates to lower their monthly mortgage payment.
Borrowers can also consider a home equity line of credit (HELOC), which takes out a loan against the equity they own in the home. This allows consumers who already have a low interest rate to take out a line of credit without affecting the interest rate on their mortgage overall. HELOCs require borrowers to have good credit, have closing costs that are similar to that of a mortgage, have variable interest rates and the potential of foreclosure.
If you are interested in comparing your loan options to see what's best for your financial situation, contact Credible to speak to a loan expert and get all of your questions answered.
Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at firstname.lastname@example.org and your question might be answered by Credible in our Money Expert column.