CoreLogic’s latest Home Price Index (HPI) and HPI Forecast for September 2021 has found that demand for the short supply of homes listed remained solid through the end of the summer, driving prices upward 18% year-over-year in September. On a month-over-month basis, home prices rose by 1.1%, compared to August 2021.
The report found that millennials continue to comprise most of the homebuyer demand, as they migrate to tech hubs including Seattle; San Jose, California; and Austin, Texas, yet many first-time buyers continue to be priced out if the market.
As evidenced by the recent Realtor.com Rental Report for September 2021, despite sharp declines during the time of the pandemic, large metro U.S. cities considered tech hotbeds have rebounded, and with that influx of residents, comes a rise in rent. Buyers who are forced to the sidelines, have been turning to rent, as analysis of the 10 biggest U.S. tech cities eclipsed rent process reported in March 2020 by an average of 6.3%.
“The pandemic led prospective buyers to seek detached homes in communities with lower population density, such as suburbs and exurbs,” said Frank Martell, President and CEO of CoreLogic. “As we head into 2022, we expect some moderation in the current pattern of flight away from urban cores as the pandemic wanes.”
CoreLogic found that appreciation of detached properties (19.6%) was 7.4 percentage points higher than that of attached properties at 12.2%. Meanwhile, home price gains are forecast to slow to a 1.9% increase by September 2022, with continued affordability issues challenging potential buyers.
While the national average change in HPI was 18%, the five states with the highest year-over-year change in HPI for September 2021 included:
- Idaho with a 30.1% change
- Arizona with a 29.6% change
- Utah with a 26.2% change
- Nevada with a 23.4% change
- Tennessee with a 23.2% change
The five states with the lowest year-over-year change in HPI for September 2021 included:
- District of Columbia with a 5.1% change
- North Dakota with an 8.2% change
- Alaska with a 9.3% change
- New York with a 9.4% change
- Louisiana with a 10% change
Regionally, home prices rose in Twin Falls, Idaho, which logged the highest year-over-year increase at 36.3%. For the first time since May 2021, Michigan City, Indiana outpaced Bend, Oregon to claim the second-highest ranking for home price gains at 35.5% year-over-year.
Despite the continued rollout of vaccinations and more returning to the office for work, the option for many to work remotely has driven interest in areas where buyers could find more spacious homes with larger properties.
“Remote work has allowed many employees to buy homes further away from their office,” said Dr. Frank Nothaft, Chief Economist at CoreLogic. “These homes are often in the suburbs or exurbs, where property prices and population density are lower and single-family detached housing more common.”
Click here to read more on CoreLogic’s CoreLogic Home Price Insights report.