Home prices remained hot in May, bolstering owners’ equity but locking many would-be buyers out of the market.
Nationally, prices rose 6.6% compared to a year ago, according to a home price index released Wednesday from data provider CoreLogic. Prices rose 1.2% from April to May, the company also said.
While that’s helping current owners, “for renters and potential first-time homebuyers, it is not such a pretty picture,” CoreLogic President Frank Martell said in a release.
The company also noted that the cost of rent is growing much faster than inflation – and wages. Overall single-family rents rose 3.1% for the year in May, while rental costs in the affordable single-family rental segment of the market, which includes properties with rents less than 75% of the regional median, grew 4.7%.
Wages rose 2.5% in May compared to a year ago, the Labor Department said last month.
CoreLogic forecasts home price appreciation of 5.3% over the next 12 months, but as an earlier MarketWatch analysis showed, such forecasts have fallen short in the past as demand keeps driving the market higher. In May 2016, for example, the company forecast home prices would rise 5.3% in the coming year.
As always, the national home price picture is a roll-up of many individual local stories. Several states had lower home prices in May compared to a year ago, while some had double-digit price growth.