As 2021 was a record-breaking year for U.S. home price growth, CoreLogic has released its Home Price Index (HPI) and HPI Forecast for November 2021.
For many prospective buyers, the housing market will continue to intensify ongoing affordability challenges into the new year. Although home price growth remains at historic highs, it is projected to slow over the next year. However, economic growth and inflation will most likely lead to increases in mortgage rates, which will further wear down affordability.
"Over the past year, we have seen one of the most robust seller's markets in a generation,” said Frank Martell, President and CEO of CoreLogic. “While increased interest rates may help cool down homebuying activity, we expect 2022 to be another strong year with continuing upward price growth."
Nationally, home prices increased 18.1% in November 2021, compared to November 2020. On a month-over-month basis, home prices increased by 1.3% compared to October 2021. In November, annual appreciation of detached properties (19.4%) was 5.8 percentage points higher than that of attached properties (13.6%). Home price gains are projected to slow to a 2.8% increase by November 2022.
Naples, Florida, also logged the highest year-over-year home price increase at 36.7%, followed by Twin Falls, Idaho, which had the second-highest ranking at a 33.3% year-over-year increase.
Southeast and Mountain West regions continued to dominate the top spot, with Arizona leading the way with the strongest price growth at 28.6%. Florida ranked second place with a 25.8% growth, pushing Idaho from second to third place at 25.5%.
“Interest rates on 30-year fixed-rate mortgages averaged a record low of 2.96% during 2021, helping to keep monthly payments low in the face of record-high home prices,” said Dr. Frank Nothaft, Chief Economist at CoreLogic. “However, the Federal Reserve appears poised to allow interest rates to rise in 2022. Higher rates will intensify buyer affordability challenges, especially in overvalued local markets.”