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Affordability Issues Expected to Dampen Home Price Gains
Tuesday, January 5, 2021
Home prices rose another 1.1 percent in
November according to the CoreLogic report on its Home Price Index. The
year-over-year gain was 8.2 percent, accelerating from the annual increase of
7.3 percent posted for October. The company said that home price
growth remained consistently elevated throughout last year. Home sales are
expected to finish the year above their 2019 levels. Meanwhile, the
availability of homes for sale has dwindled with increased demand as the
pandemic deterred some potential home sellers from putting their homes on the
market. While the pandemic has created a lot
of financial insecurity, those households which maintained employment and
income stability have also been incentivized by the record low rates to buy.
This has further increased demand. The rise in home prices is increasing
downpayment requirements and exacerbating affordability issues, leaving
lower-income families renting and priced-out of the home-purchase market.
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