U.S. home price gains continued to smash records in August, fueling ongoing concerns about affordability, according to CoreLogic’s home price index report.
Month-over-month home prices increased 1.3%, as per the report, and were up 18.1% year-over-year.
In August, home prices rose sharply in the Pacific Northwest with Bend, Oregon, experiencing the highest year-over-year increase at 37.2%.
Twin Falls, Idaho, ranked second with a year-over-year increase of 35.8%.
At the state level, Idaho and Arizona again led the way with the strongest price growth at 32.2% and 29.5%, respectively.
“Home prices continue to escalate at a torrid pace as a broad spectrum of buyers drive demand for a limited supply of homes,” says Frank Martell, president and CEO of CoreLogic, in a statement. “We expect to see the trend of strong price gains continue indefinitely with large amounts of capital chasing too few assets.”
The annual U.S. increase in August was the highest in the 45-year history of the index.
CoreLogic notes that the ongoing affordability challenges within the supply-constricted market are being exacerbated by an influx in home buying activity from investors.
As the home purchase market continues to boom and buoy the post-pandemic economy, these market factors are unevenly affecting access for some buyers.
This is reflected in a recent CoreLogic consumer survey, where 59% of consumers looking to purchase a home reported combined household earnings of at least six figures, compared to the 10% of consumers looking to purchase earning less than $50,000.
Detached single-family homes saw the highest appreciation in August, as they are highest in demand due to the pandemic. Prices for detached homes were up 19.8% year over year, CoreLogic says, while prices for attached properties were up an average of 12%.
“Single-family detached homes continue to be in high demand,” says Frank Nothaft, chief economist at CoreLogic. “These properties offer more living space and distance from neighboring homes than that of attached properties. On average, detached homes have 28 percent more inside space compared to single-family attached properties and about twice as much space as apartments in multifamily structures.”
CoreLogic is forecasting that home price gains will slow to a 2.2% increase by August 2022, as ongoing affordability challenges deter some potential buyers.
Photo: Roger Starnes Sr