U.S. home prices continued to climb in September, rising 0.3% compared with August and 4.5% compared with September 2022 – and the rate of appreciation isn’t expected to slow until starting next year – according to CoreLogic’s home price index report.
Home prices have now increased annually for 140 consecutive months and are up a whopping 42% from the onset of the pandemic, CoreLogic says.
The Northeast continued to post the strongest appreciation, with Maine seeing a 10.1% annual increase, the first double-digit HPI gain recorded in any state since early 2023. It was followed Connecticut with a 9.5% increase and New Jersey at 9.2%.
Looking at the largest U.S. cities, Miami continued to lead in annual home price gains for a 15th consecutive month with an 8.5% increase. St. Louis saw the next-highest gain at 7.9%, followed by Charlotte, N.C. and Detroit – both at 6.6%.
CoreLogic forecasts that annual home price growth will continue to rise modestly through January 2024 before relaxing to 2.6% in September 2024.
Despite mortgage rates that are approaching 8%, inventory constraints and a healthy U.S. job market should help keep price growth moderate but steady over the next year, the firm says.
“While annual home price growth continued its third month of upward momentum in September, this mostly reflects a comparison with last year’s lows, when prices began to cool from double-digit growth in autumn 2022,” says Selma Hepp, chief economist for CoreLogic, in a statement.
“Still, given the continued rise of borrowing costs in 2023, it is remarkable to see how resilient home price growth has been in recent months, with September’s 0.3 percent month-over-month gain lining up with pre-pandemic trends,” Help says. “Nevertheless, as mortgage rates significantly impact affordability, certain markets with continued in-migration from more expensive states are showing renewed buoyancy and outsized monthly price gains.”
In September, the annual appreciation of detached properties (4.7%) was 0.8 percentage points higher than that of attached properties (3.9%).