U.S. home prices increased 0.8% in February compared with January and were up 4.4% compared with February 2022, according to CoreLogic’s home price index report.
However, home price gains were uneven across the country: Prices in the West fell significantly – down 4.9% in Washington, 3.1% in Montana, 1.7% in Nevada, 1.6% in Idaho, 1.6% in Utah, 1.5% in California and 0.7% in Oregon – while increasing in the South and East.
“Tech company layoffs have likely affected housing demand on the West Coast,” CoreLogic says in its report. “However, as noted in the latest CoreLogic S&P Case-Shiller Index, home prices gains are holding steady in some large East Coast metros, as workers return to offices and buyer demand renews in areas that saw relatively less appreciation during the pandemic.
“Areas in the Southern U.S. are also holding up well given current market conditions,” the report adds.
“The divergence in home price changes across the U.S. reflects a tale of two housing markets,” says Selma Hepp, chief economist at CoreLogic, in the report. “Declines in the West are due to the tech industry slowdown and a severe lack of affordability after decades of undersupply. The consistent gains in the Southeast and South reflect strong job markets, in-migration patterns and relative affordability due to new home construction.
“But while housing market challenges remain, particularly in light of mortgage rate volatility and the ongoing banking turmoil, pent-up homebuyer demand is responding favorably to lower rates in many markets,” Hepp adds. “This trend holds true even in the West, leading to a solid monthly gain in home prices in February. U.S. home prices rose by 0.8 percent in February, double the month-over-month increase historically seen and indicating that prices in most markets have already bottomed out.”