The latest iteration of CoreLogic’s [1] Home Price Index [2] (HPI) for July 2022 showed the annual home price growth rate slowed for the third consecutive month in July yet remained in an elevated state at 15.8%.
This comes at a time when the 30-year, fixed-rate mortgage toes the 6% mark, forced some prospective buyers out of the market, thus helping ease “overhead and unsustainable price growth.”
Notably, according to CoreLogic, home prices declined by 0.3% from June to July of this year, a trend unseen between 2010-2019, when price increases averaged 0.5% between those two months based.
But looking ahead, CoreLogic expects to see a balancing market with year-over-year price appreciation slowing to 3.8% by July 2023.
“Following June’s surge in mortgage rates and the resulting dampening effect on housing demand, price growth is taking a decisive turn,” said Selma Hepp [3], Interim Lead of the Office of the Chief Economist at CoreLogic. “And even though annual price growth remains in double digits, the month-over-month decline suggests further deceleration on the horizon. The higher cost of homeownership has clearly eroded affordability, as inflation-adjusted monthly mortgage expenses are now even higher than they were at their former peak in 2006.”
Top Takeaways:
- U.S. home prices (including distressed sales) increased 15.8% year over year in July 2022, compared to July 2021. On a month-over-month basis, home prices declined by 0.3% compared to June 2022.
- In July, annual appreciation of detached properties (16.1%) was 1.5 percentage points higher than that of attached properties (14.6%).
- Annual U.S. home price gains are forecast to slow to 3.8% by July 2023.
- Once again, Tampa, Florida logged the highest year-over-year home price increase of the country’s 20 largest metro areas in July, at 29.7%, while Miami moved into the second slot at 27.1%.
- Florida and South Dakota posted the highest home price gains, 29.6% and 23.7% respectively. Tennessee ranked third with a 23.2% year-over-year increase. Washington, D.C. ranked last for appreciation at 2.4%.
