CoreLogic Chief Economist Frank Nothaft said the pace of home-price gains will quicken over the next 12 months as low mortgage rates give buyers the ability to pay more for properties.
Home prices probably will increase 5.8% in the 12 months through August 2020, Nothaft said in an exclusive interview with HousingWire. That’s a faster pace than the 3.6% growth seen in August 2019 from a year earlier.
Rates for fixed mortgages will probably stay below 4% through the end of 2020, Nothaft said. Cheap financing allows homebuyers to qualify for a bigger loan because the amount they can borrow is based on their monthly payment, which drops as financing costs fall.
“We’re in a very special environment for housing demand – for the first time since at least World War II we have mortgage rates below 4% while at the same time the unemployment rate is below 4%,” Nothaft said. “That’s a golden period that will stimulate activity, and we expect sub-4 mortgage rates and sub-4 unemployment rate through at least the end of 2020.”