U.S. home price growth registered a year-over-year increase of 20% in February, another series high and marking 12 months of consecutive double-digit gains. Annual price growth has been recorded every month for the past decade. While prospective buyers outnumber sellers, a record-low number of homes for sale remains the primary culprit for the rapid price gains. The CoreLogic HPI Forecast shows national year-over-year appreciation slowing to 5% by February 2023, as rising interest rates are expected to sideline even more buyers.
”New listings have not kept up with the large number of families looking to buy, leading to homes selling quickly and often above list price,” said Dr. Frank Nothaft, chief economist at CoreLogic. “This imbalance between an insufficient number of owners looking to sell relative to buyers searching for a home has led to the record appreciation of the past 12 months. Higher prices and mortgage rates erode buyer affordability and should dampen demand in coming months, leading to the moderation in price growth in our forecast.”
Top Takeaways:
- Nationally, home prices increased 20% in February 2022, compared to February 2021. On a month-over-month basis, home prices increased by 2.2% compared to January 2022.
- In February, annual appreciation of detached properties (21.1%) was 4.8 percentage points higher than that of attached properties (16.3%).
- Home price gains are projected to slow to 5% by February 2023.
- In February, Naples, Florida logged the highest year-over-year home price increase at 41.4%. Cape Coral, Florida ranked second, with a 40% year-over-year increase. All four metro areas with the largest annual price gains in February are on Florida’s Gulf Coast. By contrast, two metros in upstate New York posted the lowest home price increases in the country: Ithaca (5.2%) and Elmira (3%).
- At the state level, warmer regions of the U.S. continued to show the largest increases, with Florida showing the country’s strongest price growth at 29.1%. Arizona ranked a close second with 28.6% growth, while Nevada was third, at 25.8% annual appreciation.
The next CoreLogic HPI press release, featuring March 2022 data, will be issued on May 3, 2022, at 8 a.m. ET.
Methodology
The CoreLogic HPI™ is built on industry-leading public record, servicing and securities real-estate databases and incorporates more than 45 years of repeat-sales transactions for analyzing home price trends. Generally released on the first Tuesday of each month with an average five-week lag, the CoreLogic HPI is designed to provide an early indication of home price trends by market segment and for the “Single-Family Combined” tier, representing the most comprehensive set of properties, including all sales for single-family attached and single-family detached properties. The indices are fully revised with each release and employ techniques to signal turning points sooner. The CoreLogic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.
