CoreLogic has released its CoreLogic Home Price Index(HPI) and HPI Forecast for December 2021, reporting an upward trend in annual home appreciation.
Consumer desire for homeownership against the continuous low supply of for-sale homes created one of the hottest housing markets in decades in 2021, sparking record-breaking home price growth. Price appreciation averaged 15% for the full year of 2021, up from the 2020 full year average of 6%. Home price growth in 2021 started off at 10% in Q1, steadily increasing and ending the year with an increase of 18% for Q4.
While there’s questions surrounding whether the U.S. is currently in a housing bubble, CoreLogic Market Risk Indicators suggest a small probability of a nationwide price decline, and points to the larger possibility that a drop in price will be limited to specific, at-risk markets. The CoreLogic HPI Forecast shows the national 12-month growth steadily slowing over 2022.
During early months of the year, rates are projected to remain above 10% while decelerating each month to a 12-month rise of 3.5% by December 2022. Comparing the average projected National HPI for 2022 with the previous year, the CoreLogic HPI Forecast shows the annual average up 9.6% in 2022.
"Much of what we’ve seen in the run-up of home prices over the last year has been the result of a perfect storm of supply and demand pressures,” said Dr. Frank Nothaft, Chief Economist at CoreLogic. “As we move further into 2022, economic factors, such as new home building and a rise in mortgage rates, are in motion to help relieve some of this pressure and steadily temper the rapid home price acceleration seen in 2021.”
Home prices nationwide increased 18.5% in December 2021, compared to December 2020. On a month-over-month basis, home prices increased by 1.3% compared to November 2021. In December, annual appreciation of detached properties at 19.7%, was 5.5 percentage points higher than that of attached properties at 14.2%. Home price gains are projected to slow to a 3.5% annual increase by December 2022.
In December, Naples, Florida logged the highest year-over-year home price increase at 37.6%. Punta Gorda, Florida had the second-highest ranking at 35.7%.
At the state level, the Southern, Southwest and Mountain West regions continued to dominate the top three spots for national home price growth, with Arizona leading the way at 28.4%. Florida ranked second with a 27.1% growth and Utah followed in third place at 25.2%.