U.S. home prices increased 1.3% in October compared with September and were up 18% compared with October 2020. However, the rate of appreciation slowed, according to CoreLogic’s home price index.
Annual home price growth was especially strong for detached residential properties, which have seen increased demand since the start of the pandemic.
“Single-family detached houses remain the preferred home for buyers during the pandemic,” says Frank Nothaft, chief economist at CoreLogic, in a statement. “This is reflected in the 19.5 percent annual price rise for detached houses, which marks another record-high for the CoreLogic Home Price Index.”
Regionally, the strongest home price growth was in the Mountain West, with Arizona and Idaho again leading the way at 28.8% and 28.7%, respectively. Utah ranked third at 24.5%.
CoreLogic notes that although home price appreciation continued to increase, it did so at a slower pace than in September.
“New household formation, investor purchases and pandemic-related factors driving demand for the limited supply of available for-sale homes continues to propel the upward spiral of U.S. home prices,” says Frank Martell, president and CEO of CoreLogic. “However, we expect home price growth to moderate over the near term as many buyers take a break for the holidays.”
CoreLogic forecasts that home price gains will slow to a 2.5% annual increase by October 2022 as affordability and economic concerns deter some potential buyers and additional for-sale inventory becomes available.
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