Home price growth could level off over the next several years, according to new report from CoreLogic.
The market tracker calculates that prices nationally will increase 3.5% in 2019, a rate that will slow from 4.5% in 2018 and ease further in 2020 and 2021.
“In a short supply of homes, rising home prices would pressure affordability and have a negative impact on the economy in general,” said Mark Fleming, chief economist for CoreLogic. “What’s concerning is that price growth deceleration, based on historical comparisons, could be indicative of a substantial number of foreclosures coming onto the market in the next several years.”
A CoreLogic report from last year, which forecasted that home prices would reach record levels in 2018, now predicts that, “prices were artificially boosted due to investor demand, but we believe that further price gains will be difficult in the years ahead.”
In a separate analysis, CoreLogic also warns that investor demand may fall over the next several years, with existing home sales to continue to decline from current levels.
Potential buyer interest currently looks lukewarm for the foreseeable future, particularly for sales in the “lower price ranges,” according to CoreLogic’s analysis of national sales data.
“While affordability is still a challenge for many first-time buyers and their families, they may find the relative stability in real estate prices and mortgage rates more than sufficient to make the move to a home of their own,” said Fleming.