Modest Gains Keep Home Price Growth Near 11-Year Low

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Modest Gains Keep Home Price Growth Near 11-Year Low

Aug 10, 2023 | News | 0 comments

In June 2023, CoreLogic’s Home Price Index (HPI) revealed a 1.6% annual home price growth, a slight rise from May 2023. This hints at a possible end to the decline, with 137 continuous months of year-over-year gains. Following 13 months of slowing, national home prices have surged by 4.8% this year until June, marking six straight months of growth.

Anticipating a surge, CoreLogic foresees U.S. home price growth accelerating through 2023, projecting a rise of about 7% by early 2024. Their predictions indicate that annual gains could reach 4.3% by June 2024.

During June 2023, a total of ten states and the District of Columbia experienced declines in annual home prices. Notably, the Northwest region of the U.S. recorded some of the most significant losses. This dip could be attributed to various factors influencing local housing markets. However, the Western region of the nation faces its own distinct challenge—a shortage of available housing inventory. This scarcity might contribute to sustained higher prices over an extended period, as the demand-supply balance continues to impact the market dynamics in this area.

Selma Hepp, CoreLogic’s Chief Economist, noted that the persistent disparity between buyers and sellers exerting pressure on home prices is evident. June’s yearly increase in price growth, according to her, reflects the nation’s economic resilience, a robust job market, and healthy consumer expenditure. Hepp added that although elevated mortgage rates are affecting loan affordability for buyers, a considerable portion of sales—nearly 40%—comprises all-cash transactions. Additionally, the substantial equity held by most baby-boomer homeowners could also contribute to price strains, particularly in markets where this generation is relocating.

Across the nation’s 20 monitored metropolitan regions, Miami achieved the most substantial year-over-year surge in home prices in June 2023, reaching 8.9%. Detroit followed with the second-highest increase at 4.2%, trailed by Atlanta at 3.9%. Notably, the Northeastern states of New Hampshire, Connecticut, Rhode Island, and New Jersey, along with Midwest states such as Missouri, Wisconsin, and Ohio, have exhibited the most robust home price gains since the commencement of 2023.