The US housing market has been experiencing fluctuations in home prices and market activity. In this report, we will explore the latest insights into the US home price trends for October 2023. The data comes from CoreLogic, a trusted source for real estate information and analytics. We’ll delve into year-over-year and month-over-month changes, regional variations, market segments, and the CoreLogic HPI Forecast.
US Home Price Insights – October 2023
National Home Price Trends
Home prices nationwide, including distressed sales, increased by a substantial 3.7% year over year in August 2023 compared with August 2022. On a month-over-month basis, there was a 0.3% increase in home prices in August 2023 compared with July 2023. These revisions incorporate newly released public data to ensure accuracy.
Forecast for the Future
The CoreLogic HPI Forecast predicts that home prices will continue to rise. It indicates a 0.2% month-over-month increase from August 2023 to September 2023 and a 3.4% year-over-year increase from August 2023 to August 2024. This forecast suggests continued growth in the housing market.
Regional Insights
While some states in the West experienced annual home price losses in August, this number has been decreasing since the spring of this year. In contrast, housing markets in New England are heating up, with states like New Hampshire, Maine, Vermont, and Rhode Island witnessing significant year-over-year price gains in August.
Selma Hepp
– Chief Economist for CoreLogic
Top Performing States
Among the states, New Hampshire stood out with a remarkable 9.4% year-over-year increase in home prices, closely followed by Maine and Vermont, both at 8.9%. These states are leading the way in home price growth.
Metro Areas
In large U.S. metros, Miami posted the most substantial gain at 8.3% year over year. This shows that not only are individual states experiencing growth, but major metropolitan areas are also contributing to the overall positive trend in home prices.
Markets at Risk
The CoreLogic Market Risk Indicator (MRI) highlights markets that are at risk of home price decline in the coming year. Spokane-Spokane Valley, WA, is at a very high risk, with a probability of over 70% for a price decline. Other areas like Cape Coral-Fort Myers, FL; Youngstown-Warren-Boardman OH-PA; Ocala, FL; and Deltona-Daytona Beach-Ormond Beach, FL are also at very high risk for price declines.
Despite some challenges, such as rising mortgage rates and increased homeownership costs, the U.S. housing market continues to show resilience. Strong demand, a healthy labor market, and wage growth support this growth. As we move into a slower buying season, it’s expected that monthly price gains may taper off. These insights provide a comprehensive view of the current state of the US housing market and its future prospects.
US CoreLogic S&P Case-Shiller Index Switches Gears in July, Increases 1% Year Over Year
The latest data from the CoreLogic S&P Case-Shiller Index reveals a significant shift in the U.S. housing market. In July, the index recorded a 1% year-over-year increase in home prices, marking a noteworthy change in direction compared to previous months. This blog post explores the key findings and trends in the housing market as reported by the CoreLogic S&P Case-Shiller Index.
2023’s Cumulative Gain: 6%
In a surprising turn of events, July’s modest growth has contributed to a 6% cumulative gain in home prices for 2023. This gain is particularly notable given the challenges faced by the housing market in 2022. While some metro areas, especially those in the Western United States, are still recovering from significant declines in 2022, the overall picture indicates a strong appreciation in home prices across the country.
Stronger Recovery in Lower-Priced Homes
One striking observation is the stronger recovery in lower-priced homes. This can be attributed to the scarcity of affordable inventory, which has created substantial demand pressure in this segment of the housing market. The CoreLogic S&P Case-Shiller Index’s data underscores the resilience of lower-priced homes.
July’s Pivot and Composite Indexes
In July, the CoreLogic S&P Case-Shiller Index made a pivotal move, increasing by 1% year over year. This growth came after the index held steady in June and experienced declines in April and May. Notably, since the index’s lowest point in January, home prices have seen a 6% increase.
The 10-city and 20-city composite indexes also experienced a shift in July, with both posting their first increase in five months. The 10-city index saw a 0.9% increase, while the 20-city index saw a more modest 0.1% rise. Smaller metros, typically more sensitive to affordability challenges, contributed to the relatively weaker performance of the 20-city index.
Monthly Trends and Regional Variations
The non-seasonally adjusted month-over-month index recorded its sixth consecutive month of gains, albeit with a smaller increase of 0.6% in July compared to 0.9% in June. These price gains reflect the market’s response to higher mortgage rates.
Key findings from regional data show that Chicago led the 20-city index with an impressive annual gain of 4.4%. Other cities, including Cleveland, New York, and Detroit, followed with similarly strong annual increases.
Reaccelerating Gains in Some Metros
July saw 18 metros experience annual home price gains that reaccelerated compared to the previous month. Notably, West Coast markets, such as San Diego, San Francisco, Los Angeles, and Seattle, recorded substantial improvements, with annual declines approximately 3 percentage points less compared to June.
Monthly Gains and Declines
Las Vegas, Phoenix, and New York were the leaders in monthly gains, each posting an increase of about 1%. In contrast, Portland, Oregon, experienced a minor decline of approximately 0.2%. While home prices generally saw increases from June across most price tiers, Portland and San Francisco recorded slight declines in the middle and high tiers.
Price Tiers and Trends
Across different price tiers, the high tier continued to exhibit relative weakness, with a 1.3% year-over-year decline. This trend aligns with observations in CoreLogic’s Single-Family Rent Index and may be indicative of higher-income households’ changing mobility during the pandemic.
On the other hand, the middle tier remained flat for the sixth consecutive month in July, while the low tier saw a return to positive territory, with a 0.5% annual increase after three months of declines.
Regional Variations in Price Gains
While high-tier home prices generally exhibited weakness, some markets, such as Chicago and New York, recorded more significant strength in recent months, with annual gains of 4% and 3%, respectively. Low-tier gains were particularly robust in New York, with a 7% annual increase, as well as Miami and Chicago, both showing 6% annual gains. Phoenix and Las Vegas, on the other hand, continued to post the largest annual declines across all price tiers.
In summary, after a strong cumulative gain of 6% in U.S. home prices since early spring, the monthly increases are stabilizing to a seasonal average. This trend is a result of the continued impact of higher mortgage rates on affordability. However, as a result of the robust spring gains, annual price appreciation is expected to accelerate in the coming months before gradually slowing down.
Regions in the Midwest continue to lead national gains, thanks to their relative affordability. Conversely, markets that experienced a reset in home prices following the surge in interest rates are anticipated to witness stronger gains over the next 12 months, especially those in the Western United States.
About CoreLogic
CoreLogic is a leading global property information, analytics, and data-enabled solutions provider. The company’s combined data from public, contributory, and proprietary sources includes over 4.5 billion records spanning over 50 years, providing detailed coverage of property, mortgages and other encumbrances, consumer credit, tenancy, location, hazard risk, and related performance information.
CoreLogic HPI Forecasts™ is based on a two-stage, error-correction econometric model that combines the equilibrium home price—as a function of real disposable income per capita—with short-run fluctuations caused by market momentum, mean-reversion, and exogenous economic shocks like changes in the unemployment rate.
Source: https://www.corelogic.com/category/intelligence/reports/home-price-insights/
