Nationwide, home prices posted another record-high year-over-year increase in April, marking the 123rd straight month of gains. Rising mortgage rates drove buyer urgency and the resulting price growth, with about 70% of U.S. homes selling for more than asking price this spring. However, higher mortgage rates will likely also put the brakes on buyer demand in the coming months, causing annual home price appreciation to cool to 5.6% by April 2023.
“The record growth in home prices is a result of a scarcity of for-sale inventory coupled with eager buyers who want to purchase before mortgage rates go higher,” said Patrick Dodd, president and CEO at CoreLogic. “Most buyers who closed on their home in April had locked in their mortgage rate in February or March when rates were lower than today. With 30-year fixed mortgage rates much higher now, we expect to see waning buyer activity because of eroding affordability. Consequently, our forecast projects slowing price growth over the coming year.”
Top Takeaways:
- U.S. home prices (including distressed sales) increased 20.9% in April 2022, compared to April 2021. On a month-over-month basis, home prices increased by 2.6% compared to March 2022.
- In April, annual appreciation of detached properties (21.8%) was 4 percentage points higher than that of attached properties (17.8%).
- Annual U.S. home price gains are forecast to slow to 5.6% by April 2023 as rising mortgage rates and affordability challenges impede buyer demand.
- As in March’s HPI, Tampa, Florida logged the highest year-over-year home price increase of the country’s 20 largest metro areas in April, at 33.1%. Phoenix again ranked second, with a 29.7% year-over-year gain. On the lower end of the price growth spectrum was New York, at 9.8%. New York was one of the major U.S. metros that lost population in 2021, which is likely contributing to the sluggish price growth when compared with other areas.
- Florida and Arizona posted the highest home price gains, a respective 32.4% and 28.1%. Tennessee ranked third with a 27.2% year-over-year increase. These three states also saw the nation’s highest annual appreciation in March.
The next CoreLogic HPI press release, featuring May 2022 data, will be issued on July 5, 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.
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