Annual home price growth fell again to 3.1% again in March 2023, the lowest rate of appreciation since the spring of 2012—still, growth continued its upward trend now increasing for the 134th consecutive month.
However, 10 states, mostly in the west, saw notable declines in annual home price growth according to CoreLogic, a trend which reflects the region’s lack of affordability and continued inventory shortages. Also, demand for higher-priced homes is slowing compared with median-priced homes, thus pulling appreciation down in that region at a faster pace.
Potential homebuyers are still sitting on the sidelines due to inflation, slowing job growth, and a forecasted recession, and mortgage interest rates hovering near 5.5%. As a result of these conditions, CoreLogic projects that U.S. annual home price growth will continue to decline over the spring and early summer before picking back up later in 2023.
“While housing markets across the country continue to send mixed signals, prices in many large metros appeared to have turned the corner, with the U.S. recording a second month of consecutive monthly gains,” said Selma Hepp, Chief Economist at CoreLogic. “At 1.6%, the month-over-month increase was twice the average seen between 2015 and 2020.”
“The monthly rebound in home prices underscores the lack of inventory in this housing cycle,” Hepp continued. “In addition, while the lack of affordability generally weighs on home price growth, mobility resulting from remote working conditions appears to be a current driver of home prices in some areas of the country.”
According to CoreLogic, the top takeaways from their report include:
- U.S. home prices (including distressed sales) increased by 3.1% year over year in March 2023 compared with March 2022. On a month-over-month basis, home prices increased by 1.6% compared with February 2023.
- In March, the annual appreciation of attached properties (4.6%) was 2.1 percentage points higher than that of detached properties (2.5%).
- CoreLogic forecasts show annual U.S. home price gains moving to 4.6% by March 2024.
- Miami posted the highest year-over-year home price increase of the country's 20 tracked metro areas in March, at 14.8%, while Tampa, Florida, continued to rank second at 6.9%.
- Among states, Vermont and Indiana recorded the highest annual home price gains, 9.9% and 9.2%, respectively. Florida posted the third-highest growth, with an 8.9% year-over-year increase. Ten states recorded annual losses: Washington (-7.4%), Idaho (-3.6%), Nevada (-3.5%), Utah (-3.4%), California (-3%), Montana (-2.3%), Oregon (-2%), Colorado (-1%), Arizona (-0.9%) and New York (-0.6%).