Forecast predicts a modest decline in home prices over the twelve months ending June 2021. A sign of a solid foundation and resiliency in the housing market in the face of the pandemic, stronger home prices this summer reflect improved affordability, demographic demands, supply constraints and continued strong interest in purchasing a home.
The renewed pickup of national home price growth, the impact on local markets continues to fluctuate. For example, home prices in Philadelphia experienced an annual gain of 8.4% in June, driven by an uptick in New York City residents purchasing homes, likely in an effort to migrate from the coronavirus (COVID-19) hotspot. Meanwhile, affordability constraints in San Francisco led to an annual decline in home prices of 0.2%.
A monthly update of the overall health of housing markets across the country, predicts that metro areas with an elevated resurgence of COVID-19 cases–like Prescott, Arizona, and Lake Havasu, Arizona–are at the greatest risk (above 60%) of a decline in home prices over the next 12 months. Other metro areas with a high risk of price declines include Las Vegas, Nevada; Peoria, Illinois; and Worchester, Massachusetts.