The US housing market has been experiencing fluctuations in home prices and market activity. In this blog post, we will explore the current market trends and forecast for home prices in the United States. The information provided here is based on data from CoreLogic, a leading provider of property information and analytics. By analyzing the latest data, we can gain valuable insights into the state of the housing market and make informed decisions. So let's dive in and explore the US Home Price Insights for 2023.
US Home Price Insights – September 2023
The CoreLogic HPI and HPI Forecasts provide valuable data and analysis to understand the current market trends and make informed decisions. In this comprehensive report, we'll provide you with the latest insights into the US housing market as of September 2023. We'll explore trends, forecasts, and regional variations in home prices, giving you a clear picture of the current real estate landscape.
Overview of July 2023 Home Prices
Home prices nationwide, including distressed sales, increased year over year by 2.5% in July 2023 compared with July 2022. This indicates a positive trajectory in the housing market, with property values on the rise. Additionally, on a month-over-month basis, home prices saw a healthy increase, climbing by 0.4% in July 2023 compared with June 2023. It's worth noting that CoreLogic follows standard procedures for revisions with public records data to ensure data accuracy.
Forecast for Home Prices
The CoreLogic HPI Forecast predicts continued growth in home prices. Specifically, it anticipates a month-over-month increase of 0.4% from July 2023 to August 2023 and a year-over-year increase of 3.5% from July 2023 to July 2024. These forecasts suggest a stable and favorable market for homeowners and prospective buyers.
Annual U.S. Home Price Growth Rebounds in July
In July, U.S. home price gains bounced back year over year, reaching 2.5%. This growth follows two months of 1.6% annual gains. The annual reacceleration can be attributed to six consecutive monthly gains, driving prices approximately 5% higher than their lowest point in February.
However, it's worth noting that the 11 states that experienced home price declines were all located in the West. Nevertheless, given the inventory shortages in these markets, this trend may be short-lived, and recent buyer competition could drive prices higher once again. CoreLogic projects that all states that saw year-over-year losses in July will likely start posting gains by October of this year.
Nevertheless, the projection of prolonged higher mortgage rates has dampened price increase forecasts over the next year, particularly in less-affordable markets. But as there is still an extreme inventory shortage in the Western U.S., home prices in some of those markets should see relatively more upward pressure.”
– Chief Economist for CoreLogic
National and State Maps – July 2023
The CoreLogic HPI provides detailed measures for various market segments, known as tiers. These segments are based on factors such as property type, price, time between sales, loan type (conforming vs. non-conforming), and distressed sales. Across the nation, home prices saw a year-over-year increase of 2.5% in July.
Notably, several states, including Arizona, California, Colorado, Idaho, Montana, Nevada, Oregon, Texas, Utah, Washington, and Wyoming, experienced declines in annual home prices. Conversely, Vermont led with the highest increase at 8.5%, followed closely by New Hampshire and New Jersey, both at 7.3%.
HPI Top 10 Metros Change
The CoreLogic HPI continues to provide valuable insights, segmented by property type, price, sales intervals, loan type, and distressed sales. For July, let's take a closer look at home price changes in some of the largest U.S. metropolitan areas. Miami stands out with the largest gain, posting an impressive 9% year-over-year increase in home prices.
Markets to Watch: Top Markets at Risk of Home Price Decline
The CoreLogic Market Risk Indicator (MRI) offers a monthly assessment of the overall health of housing markets nationwide. According to the MRI, Provo-Orem, UT, carries a very high risk (70%-plus probability) of a decline in home prices over the next 12 months. Other areas with significant risk include Spokane-Spokane Valley WA, Cape Coral-Fort Myers, FL, North Port-Sarasota-Bradenton, FL, and Lakeland-Winter Haven, FL. These insights serve as important indicators for both buyers and sellers in these markets.
Hence, the US housing market continues to show resilience and growth, with home prices on an upward trajectory. While challenges such as high mortgage rates and inventory shortages persist, the overall outlook remains positive. Buyers, sellers, and investors should closely monitor the specific dynamics in their respective markets to make informed decisions. CoreLogic's data and insights play a crucial role in understanding the ever-evolving real estate landscape, enabling individuals and businesses to navigate the market effectively.
US CoreLogic S&P Case-Shiller Index
The CoreLogic S&P Case-Shiller Index provides valuable insights into the health of the housing market and its trends. Let us delve into the latest developments in the US housing market, as reflected in the CoreLogic S&P Case-Shiller Index for the month of June 2023. The data suggests significant shifts in market dynamics, impacting both home prices and buyer behavior.
Changing Market Dynamics
The US housing market is undergoing a transformation, with Midwestern metro areas like Cleveland and Chicago emerging as the hottest housing markets, while previously booming Mountain-West cities like Denver and Phoenix are cooling off. These shifts are indicative of changing buyer preferences and economic factors affecting the real estate landscape.
Impact of Elevated Mortgage Rates
Despite a strong start in 2023, the housing market is facing headwinds due to elevated mortgage rates. These rates are creating challenges for potential buyers, limiting their ability to enter the market. As a result, the market is expected to see moderate gains for the remainder of the year. However, according to CoreLogic's Home Price Index forecast, home prices are still projected to reaccelerate and achieve mid-single-digit growth rates by the end of the year.
Regional Variations in Price Growth
The acceleration in home prices has been most notable in markets that remained relatively affordable throughout the pandemic and experienced less significant shifts due to household migration. These markets include those in the Midwest and New England regions. As a result, home prices in these areas are now catching up with traditionally more expensive markets.
June S&P Case-Shiller Index Insights
In June, the CoreLogic S&P Case-Shiller Index revealed a significant trend: flat year-over-year home prices. However, this seemingly stagnant data is a reflection of price drops that occurred in 2022. Nevertheless, the non-seasonally adjusted, month-over-month index posted its fifth consecutive month of gains, rising by 0.9% in June. While this increase is slightly smaller than the one recorded in May (1.3%), it signifies a continuing upward trajectory.
Market Recovery and Plateau
With five months of monthly gains, home prices have now risen by 5% since February of the same year and have returned to their 2022 peak levels. This recovery has been robust, but it is also accompanied by signs of a plateau, primarily due to the influence of higher mortgage rates.
In June, several metropolitan areas experienced annual home price gains that accelerated from the previous month. Notably, West Coast markets like San Diego and Seattle stood out for their significant reacceleration, followed by San Francisco and Los Angeles.
Cleveland and Chicago led the nation with the largest monthly gains, at 1.5% and 1.4%, respectively. In contrast, San Francisco, Denver, and Tampa, Florida recorded the smallest gains, all below 0.5%. It's important to note that while Chicago and Miami saw substantial increases in June, the gains in slower-growing metros align with historical seasonal patterns for the May to June timeframe.
Price Tier Analysis
When analyzing price tiers, the high tier continued to exhibit relative weakness, experiencing a -2.6% year-over-year decline, marking the fourth consecutive month of annual declines. This trend aligns with observations in CoreLogic's Single-Family Rent Index and may be attributed to the greater mobility of higher-income households during the pandemic, which has since slowed.
Additionally, the surge in demand for luxury and second homes in 2021 and 2022 has tapered off due to increasing mortgage rates and slowing home sales. However, some markets, such as Atlanta and New York, have displayed strength in the high-tier segment in recent months, both experiencing 1.5% month-over-month increases.
Conversely, the low-priced tier in Tampa reported no price growth from the previous month, indicating variations in price performance across different market segments.
The data from the CoreLogic S&P Case-Shiller Index for June 2023 paints a dynamic picture of the US housing market. While challenges like elevated mortgage rates are impacting buyer behavior and moderating price gains, the market continues to show resilience and adaptability. Regional variations in price growth, as well as disparities across price tiers, highlight the complexity of the real estate landscape. As we progress through the year, it will be crucial to monitor these evolving trends and market shifts, providing valuable insights for both buyers and sellers.
CoreLogic is a leading global property information, analytics, and data-enabled solutions provider. The company’s combined data from public, contributory, and proprietary sources includes over 4.5 billion records spanning over 50 years, providing detailed coverage of property, mortgages and other encumbrances, consumer credit, tenancy, location, hazard risk, and related performance information.
The CoreLogic HPI™ is built on industry-leading public record, servicing, and securities real-estate databases and incorporates more than 40 years of repeat-sales transactions for analyzing home price trends. Generally released on the first Tuesday of each month with an average five-week lag, the CoreLogic HPI is designed to provide an early indication of home price trends by market segment and for the “Single-Family Combined” tier, representing the most comprehensive set of properties, including all sales for single-family attached and single-family detached properties.
CoreLogic HPI Forecasts™ is based on a two-stage, error-correction econometric model that combines the equilibrium home price—as a function of real disposable income per capita—with short-run fluctuations caused by market momentum, mean-reversion, and exogenous economic shocks like changes in the unemployment rate.