PROVIDENCE – The home price index in May for the Providence-Warwick-Fall River metro area increased 5.2 percent year over year to 190, according to CoreLogic, a real estate analytics company. The metro area HPI increased 1.2 percent from April.
“For current homeowners, the strong run-up in prices has boosted home equity and, in some cases, spending,” said Frank Martell, president and CEO of CoreLogic. “For renters and potential first-time homebuyers, it is not such a pretty picture. With price appreciation and rental inflation outstripping income growth, affordability is destined to become a bigger issue in most markets.”
The HPI for Rhode Island increased a bit less year over year than the Providence metro area, increasing 4.2 percent from May 2016 to 191, with a 1.1 percent increase from April.
Nationally, the HPI increased 6.6 percent year over year in May, and 1.2 percent from the previous month.
Massachusetts’ HPI increased 6.5 percent year over year.
“The market remained robust, with home sales and prices continuing to increase steadily in May,” said Frank Nothaft, chief economist for CoreLogic. “While the market is consistently generating home price growth, sales activity is being hindered by a lack of inventory across many markets.”
The report also pointed to an unfavorable increase in the price of affordable rentals.
“This tight inventory is also impacting the rental market, where overall single-family rent inflation was 3.1 percent on a year-over-year basis in May of this year compared with May of last year,” said Nothaft. “Rents in the affordable single-family rental segment (defined as properties with rents less than 75 percent of the regional median rent) increased 4.7 percent over the same time, well above the pace of overall inflation.”
CoreLogic’s HPI base point of 100 was set the year 2000. CoreLogic’s HPI includes distressed home sales.
Chris Bergenheim is the PBN web editor.
