U.S. home prices dipped 0.1% in October compared with September but remained up 10.1% compared with October 2021, according to CoreLogic’s home price index.
The firm forecasts home prices will decrease steadily until next spring, when the market could post some annual losses.
CoreLogic says the following factors are slowing home price depreciation:
- Low inventory due to seller preferences to keep affordable mortgage rates that they have already locked in;
- Homebuyer loss of purchase power: and
Current economic uncertainty.
The firm says annual U.S. price growth could move into negative territory by spring 2023, but then slowly tick back into single digits as the year progresses.
“Following the recent mortgage rate surge above 7 percent, real estate activity and consumer sentiment regarding the housing market took a nosedive,” says Selma Hepp, interim lead of the office of the chief economist at CoreLogic, in a statement. “Home price growth continued to approach single digits in October, and it will move in that direction for the rest of the year and into 2023.”
“However,” Hepp continues, “while some housing markets have seen significant recalibration since the spring price peak and are likely to post losses in 2023, further deteriorating for-sale inventory, some relief in mortgage rate increases and relatively positive economic news may help eventually stabilize home prices.”
Miami posted the highest year-over-year home price increase of the country’s 20 largest metro areas in October, at 22.6%, while Tampa, Florida retained the No. 2 slot at 20%.
Florida and South Carolina recorded the highest home price gains, 20.2% and 16.1%, respectively.
Georgia and North Carolina tied for third, with 15.3% year-over-year increases. Washington, D.C. ranked last for appreciation at 0.2%.