Home values continue to increase in most states during this year’s spring selling season, and a handful are experiencing eye-popping growth.
Nationally, home prices increased 6.2 percent in April compared with the same month a year ago, according to the latest figures from CoreLogic. Only Connecticut saw prices fall year-over-year, by a half-percent, while four other states — New Jersey, West Virginia, Pennsylvania and Maryland — registered gains of less than one percent. There were nine states with annual increases that exceeded the national average.
Prices are getting pushed up largely due to a shortage of homes on the market, resulting in bidding wars among motivated homebuyers, who are using low mortgage rates to increase their purchasing power.
Looking ahead, with demand holding steady and supply levels still far from sufficient, the market for entry-level and mid-priced homes will likely continue to be the most competitive heading into the summer months," said Lawrence Yun, chief economist of the National Association of Realtors, in a statement.
The number of existing homes for sale in April was down 3.6 percent from a year ago, but up 9.2 percent from March, according to the NAR. The low inventory problems is especially acute in the West, causing bigger spikes in prices and depressing sales.
For instance, in California the number of months needed to sell the number of homes currently on the market was 3.5 months in April. The long-run average home supply is 6.1 months.
"An expected gradual rise in interest rates and more homes offered for sale are expected to moderate appreciation in the coming year,” said Dr. Frank Nothaft, chief economist for CoreLogic in a statement.