As interest rates dropped in April, homebuyers rushed into the market, sending home prices shooting up, according to the latest report from CoreLogic, a property information, analytics and data-enabled solutions provider.

Home prices, including distressed sales, increased 6.9% annually in April and 1.6% from March, according to the CoreLogic Home Price Index and HPI Forecast.

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(Source: CoreLogic)

“Mortgage rates in April dipped back to their lowest level since November of last year, spurring home-buying activity,” CoreLogic Chief Economist Frank Nothaft said. “In some metro areas, there has been a bidding frenzy as multiple contracts are placed on a single home.

“This has led home-price growth to outpace rent gains,” Nothaft said. “Nationally, home prices were up 6.9% over the last year, while rent growth for single-family rental homes recorded a 3% rise through April, according to the CoreLogic Single-Family Rental Index.”

Looking ahead, the forecast indicates home prices will increase 5.1% by April 2018, and 0.7% from April to May this year. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“Interest rates on fixed-rate mortgages are down by one-fourth of a percentage point since mid-March, just in time to support the spring home-buying season,” CoreLogic President and CEO Frank Martell said.

“Some metro areas have low for-sale inventory, short time-on-market trends and homes that sell above the list price,” Martell said. “Geographically, gains were strongest in the West with Washington and Utah posting double-digit gains.”