According to a report released by CoreLogic, a real estate data analytics firm, home prices increased yet again nationwide by 12.2 percent for the month of February compared to the same month last year. The string of month to month housing prices nationally has been on this roll for about two yearsreal estate prices on the move, with many wondering when appreciation will falter. Will we soon see values stop their ride and turn back the other direction?

 

“Housing analysts have been saying that this extended period of home value increases stretching out to two years has to moderate soon and while there are areas that are seeing some plateau as far as the national average is concerned, it’s still on a brisk clip in the markets we're in,” said Shaun Cohen of EquityBuild Finance.

As home values continue to rise, the number of consumers who can qualify for a typical mortgage begins to fall. Values can be out of reach and the consumers have the choice of putting more money down to lower the loan amount, buy a smaller house or continue to rent. Rising prices then create more renters and more renters mean higher rents for investors as rental vacancies fall.

Mortgage rates have been in their current range for about a year now and while so-called experts have been predicting higher rates sooner rather than later so far their claims haven’t come true. On the other hand, buyers can’t rely on mortgage rates to fall back to their historic levels either, so offsetting higher home prices with a lower rate isn’t likely to happen.

That’s good news for investors, especially those who are building new investment properties in lieu of buying existing homes. As home prices tend to fall the further away from the urban center, real estate investors can build new single family homes to rent much cheaper compared to buying and rehabilitating or building near the central city. And as home prices continue to rise overall, equity builds as the push to less expensive rental housing gains strength. You can find out more about investing at EquityBuild and real estate investment opportunities at EquityBuild Finance.