June 2 (UPI) -- Home prices across the country increased 1.4 percent in April from last month and 5.4 percent compared with a year ago, according to data from the CoreLogic Home Price Index.
Prices increased as more homes were sold in the first quarter of this year. CoreLogic is predicting price growth will slow in May.
"The very low inventory of homes for sale, coupled with homebuyers' spur of record-low mortgage rates, will likely continue to support home price growth during the spring," Frank Nothaft, chief economist at CoreLogic, said in a statement. "If unemployment remains elevated in early 2021, then we can expect home prices to soften. Our forecast has home prices down in 12 months across 41 states."
CoreLogic said home-purchase activity slowed down from March to April compared with last year because of shelter-in-place orders nationwide.
"An unprecedented spike in unemployment, dented home-buying activity fueled by millennials," CoreLogic said. "Nationally, the for-sale inventory of entry-level homes plummeted on average 25 percent in April. Should this trend continue, we may see an adverse effect on home sales in the near term."
Frank Martell, president and chief executive of CoreLogic, said a tight housing supply and pent-up demand is providing optimism for the housing market to bounce back in the long run once coronavirus restrictions are removed.
Currently, the National Association of Realtors is forecasting an 11 percent drop in 2020 housing sales compared with last year.
"The next 12 to 18 months are going to be very tough times for the broader economy," Martell said. "As employment and economic activity begins to pick up, as it will surely do, we expect housing to be a driver in a national recovery."