Although U.S. home prices continued their 127-month run of consecutive annual gains in August, they slowed for the fourth straight month to 13.5%. That’s the lowest year-over-year appreciation recorded since April 2021 and partially reflects continued cooling buyer demand due to higher mortgage rates and housing trends motivated by the COVID-19 outbreak winding down. The 0.7% month-over-month price decrease also indicates reduced homebuyer enthusiasm, with nearly three-quarters of states posting declines from July.
“The increased cost of homeownership has dampened buyer demand and caused prices to decelerate at a faster pace than initially expected,” said Selma Hepp, interim lead of the Office of the Chief Economist at CoreLogic. “Housing markets on the West Coast and in the Mountain West, as well as second-home markets, recorded particularly strong price growth in the summer of 2021 but were the first to see month-over-month price declines during the same period this year. While decelerating price growth and price declines benefit younger potential homebuyers, mortgage rates that are approaching 7% may cut many hopefuls out of the picture.”
Top Takeaways:
- U.S. home prices (including distressed sales) increased 13.5% year over year in August 2022 compared to August 2021. On a month-over-month basis, home prices declined by 0.7% compared to July 2022.
- In August, annual appreciation of detached properties (13.7%) was 0.9 percentage points higher than that of attached properties (12.8%).
- Annual U.S. home price gains are forecast to slow to 3.2% by August 2023.
- Miami posted the highest year-over-year home price increase of the country’s 20 largest metro areas in August, at 27.1%, while Tampa, Florida dropped to the second spot at 26.9%. Hurricane Ian’s impact on Tampa’s housing market and other parts of Florida could cause price growth there to relax even more than the projected U.S. slowdown.
- Florida and Tennessee posted the highest home price gains, 26.4% and 20% respectively. North Carolina ranked third with a 19.9% year-over-year increase. Washington, D.C. ranked last for appreciation at 2.4%.
The next CoreLogic HPI press release, featuring September 2022 data, will be issued on November 1, 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.
