In a new update from CoreLogic, industry experts dive into the key issues affecting the mortgage and housing industry, from rents to interest rates and price growth.
First, Molly Boesel, Principal, Economist, at CoreLogic noted that U.S. single-family rents increased 3% year over year in March 2020, the same rate of increase as March 2019, according to the CoreLogic Single-Family Rent Index (SFRI). The index measures rent changes among single-family rental homes, including condominiums, using a repeat-rent analysis to measure the same rental properties over time. Single-family rents were on the rise in early 2020 prior to the COVID-19 outbreak, having increased by an average of 3.1% year over year for the first three months of the year. Impacts from state and local shutdowns on the rental market will be apparent in the coming months.
On the homeowner side, CoreLogic found that in February 2020, before the COVID-19 pandemic, annual home price growth was 4.2%.
Looking forward, COVID-19 is likely to have varying impacts in housing markets across the country. In metros where job losses are higher than average, housing markets may see a larger impact from the economic shutdown, particularly if home price growth was already slowing coming into the pandemic. For example, states with the largest number of unemployment claims and slowing home-price trends include some markets in Nevada, Florida, and Illinois.
While data released over the coming months will provide a clearer picture of coronavirus’s impact on home prices, economists say buyers shouldn’t expect widespread dramatic price drops similar to those seen in the Great Recession. “Buyers have been, a lot of times, referring back to 2008,” says Selma Hepp, Deputy Chief Economist at CoreLogic. “It’s part of the expectations because of the prior cycle.”