While average U.S. home prices continue to rise, the climb is slowing dramatically and Utah prices lost ground, according to the CoreLogic Home Price Index, released recently. CoreLogic is a global property information, analytics and data-enabled solutions provider based in Irvine, California. The firm also released its HPI Forecast report.
While annual U.S home price growth rose for the 133rd straight month in February, the 4.4 percent increase was the lowest recorded since 2019. Eight states, including Utah, and Washington, D.C., recorded annual home price losses, with much of the depreciation seen in the{mprestriction ids="1,3"} relatively expensive Western U.S., including California, Idaho, Oregon, Washington and Utah. Utah home prices dropped 1.6 percent, the report said.
Tech company layoffs have likely affected housing demand on the West Coast, However, as noted in the latest CoreLogic S&P Case-Shiller Index, home prices gains are holding steady in some large East Coast metros, as workers return to offices and buyer demand renews in areas that saw relatively less appreciation during the pandemic. Areas in the Southern U.S. are also holding up well given current market conditions.
“The divergence in home price changes across the U.S. reflects a tale of two housing markets,” said Selma Hepp, chief economist at CoreLogic. “Declines in the West are due to the tech industry slowdown and a severe lack of affordability after decades of undersupply. The consistent gains in the Southeast and South reflect strong job markets, in-migration patterns and relative affordability due to new home construction.”
“But while housing market challenges remain, particularly in light of mortgage rate volatility and the ongoing banking turmoil,” Hepp continued, “pent-up homebuyer demand is responding favorably to lower rates in many markets. This trend holds true even in the West, leading to a solid monthly gain in home prices in February. U.S. home prices rose by 0.8 percent in February, double the month-over-month increase historically seen and indicating that prices in most markets have already bottomed out.”
Top findings of the report are:
- U.S. home prices (including distressed sales) increased by 4.4 percent year over year in February 2023 compared to February 2022. On a month-over-month basis, home prices increased by 0.8 percent compared with January 2023.
- In February, the annual appreciation of attached properties (5.4 percent) was 1.4 percentage points higher than that of detached properties (4 percent).
- CoreLogic forecasts show annual U.S. home price gains slowing to 3.7 percent by February 2024.
- Miami posted the highest year-over-year home price increase of the country’s 20 tracked metro areas in February, at 15.6 percent, while Tampa, Florida, continued to rank second at 9.3 percent.
- Florida and Maine recorded the highest annual home price gains, 11.3 percent and 10.3 percent, respectively. South Carolina posted the third-highest growth, with a 9.2 percent year-over-year increase. Eight states and districts recorded annual losses: Washington (-4.9 percent), Montana (-3.1 percent), Nevada (-1.7 percent), Idaho (-1.6 percent), Utah (-1.6 percent), California (-1.5 percent), Washington, D.C. (-1.2 percent) and Oregon (-0.7 percent).{/mprestriction}
