The CoreLogic Home Price Index for March 2023 shows that U.S. home price growth fell to 3.1%, the lowest rate of appreciation since the spring of 2012.
And while home price growth rose for the 134th consecutive month (up 1.6% compared with February), it declined from one year earlier in 10 states, mostly those in the West, which partially reflects the region’s lack of affordability and continued inventory shortages.
Also, demand for higher-priced homes is slowing compared with median-priced homes, thus pulling appreciation down in that region at a faster pace.
Some potential homebuyers remain hesitant due to inflation; slowing job gains and wage growth; a potential recession; and interest rates that are still elevated above a mortgage rate of 5.5% that would likely attract more buyers to the market. As a result of these conditions, CoreLogic projects that U.S. annual home price growth will continue to decline over the spring and early summer before picking back up later in 2023.
“While housing markets across the country continue to send mixed signals, prices in many large metros appeared to have turned the corner, with the U.S. recording a second month of consecutive monthly gains,” says Selma Hepp, chief economist at CoreLogic. “At 1.6 percent, the month-over-month increase was twice the average seen between 2015 and 2020.
“The monthly rebound in home prices underscores the lack of inventory in this housing cycle,” Hepp adds. “In addition, while the lack of affordability generally weighs on home price growth, mobility resulting from remote working conditions appears to be a current driver of home prices in some areas of the country.”
Miami posted the highest year-over-year home price increase of the country’s 20 tracked metro areas in March, at 14.8%, while Tampa continued to rank second at 6.9%.
Among states, Vermont and Indiana recorded the highest annual home price gains, 9.9% and 9.2%, respectively. Florida posted the third-highest growth, with an 8.9% year-over-year increase.
Ten states recorded annual losses: Washington (-7.4%), Idaho (-3.6%), Nevada (-3.5%), Utah (-3.4%), California (-3%), Montana (-2.3%), Oregon (-2%), Colorado (-1%), Arizona (-0.9%) and New York (-0.6%).
Photo by Paul Kapischka on Unsplash
