Norada Real Estate Investments

Housing Market Insights and Home Price Predictions – June 2024

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US home price growth is slowing down! Is a price decline coming in some markets? If you're thinking about buying a house, here's a breakdown of the latest data to help you make informed decisions. This article dives into national trends and highlights specific areas to watch.

Nationally, home prices are still on the rise, but the pace is slowing. As of April 2024, year-over-year growth sits at 5.3%, according to CoreLogic. That's a healthy increase, but down from the double-digit figures we saw in some parts of the country last year. This moderation is likely due to a combination of factors, including:

  • More homes becoming available: In some areas, there's been an increase in listings, giving buyers more options.
  • Higher interest rates: Mortgage rates are hovering around 7%, making monthly payments more expensive for potential buyers.

Current Housing Market Trends

As of April 2024, home prices nationwide, inclusive of distressed sales, witnessed a notable year-over-year increase of 5.3% compared to April 2023. Moreover, on a month-over-month basis, home prices surged by 1.1% from March 2024.

It's essential to recognize that revisions with public records data are standard practice in the industry. To uphold accuracy, entities like CoreLogic incorporate newly released public data to provide updated results.

Predictions for Home Prices

What's the forecast for the future?

The CoreLogic Home Price Index (HPI) Forecast paints a picture of continued growth. It suggests that home prices are poised to rise by 0.8% from April 2024 to May 2024, with a substantial 3.4% increase expected on a year-over-year basis from April 2024 to April 2025.

Charting the Path Forward

Looking ahead, the trajectory of home price growth indicates a cooling trend by spring 2025. While annual appreciation stood above 5% in April, projections suggest a slowdown to 3.4% nationally. Only a handful of states are anticipated to witness increases surpassing 6%.

This moderation is attributed to various factors, including the increasing availability of homes on the market in certain regions and the prevailing 7% average for 30-year fixed-rate mortgages. These mortgage rates significantly impact America's ongoing housing affordability challenges.

Expert Insights

Here are some key takeaways from Dr. Selma Hepp, Chief Economist at CoreLogic:

  • The strong performance of the spring market in 2023 is still influencing the year-over-year numbers.
  • Rising interest rates have cooled down some of the usual spring buying frenzy.
  • Buyers are becoming more sensitive to affordability challenges as rates rise.
  • Markets with a surge in new listings or construction, and areas with significant increases in homeowner costs, are seeing a more pronounced slowdown in price growth.

Regional Variances

The CoreLogic HPI delves into regional nuances, offering insights into state-level trends. Nationally, home prices surged by 5.3% year over year in April 2024, with no states reporting declines. New Hampshire, New Jersey, and South Dakota led the pack with the highest annual increases, ranging from 10.8% to 12%.

Metropolitan Dynamics

Metropolitan areas play a pivotal role in shaping the real estate landscape. Examining home price changes across ten select metros in April 2024 reveals intriguing dynamics. San Diego topped the list with a substantial 9.9% year-over-year gain.

Is There a Chance of Price Declines?

The CoreLogic Market Risk Indicator (MRI) identifies markets potentially vulnerable to home price declines. Palm Bay-Melbourne-Titusville, FL emerges as a high-risk area, with a probability exceeding 70% for a price downturn in the next 12 months. Other areas, including Atlanta-Sandy Springs-Roswell, GA, Spokane-Spokane Valley, WA, and Deltona-Daytona Beach-Ormond Beach, FL, also warrant attention due to their susceptibility to price declines.

The Takeaway?

The US housing market is still experiencing growth but at a more moderate pace. This is welcome news for affordability. If you're a potential buyer, do your research and consider how rising interest rates might affect your monthly payment. By staying informed about national trends and specific market conditions, you'll be in a strong position to make smart decisions about your home purchase.

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US Home Prices Hit New Record Highs Despite Rising Rates

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Hold on to your hats, folks! Home prices in the US have just reached a brand new all-time high, according to the S&P CoreLogic Case-Shiller Home Price Index. This might sound surprising considering mortgage rates have been climbing, but let's dive deeper and unpack what this means for you, whether you're a buyer or a seller.

Home Prices Hit New Record Highs: A Look at the Numbers

Soaring Prices, Soaring Markets

The latest report shows a national increase of 6.5% year-over-year in home prices. That's a significant jump, especially considering the headwinds from rising mortgage rates. This trend isn't isolated, either. The Case-Shiller index has hit new highs in a remarkable six out of the past twelve months!

This hot streak in real estate mirrors what's been happening in the stock market, with the S&P 500 reaching record highs frequently as well. It's a sign of a strong overall economy, but one that also presents challenges for potential homebuyers looking for an affordable entry point.

The Double-Edged Sword: Wealth Gains and Buyer Frustration

This surge in home prices has a double-edged effect. On the positive side, it's boosting overall household wealth. The combined gains from real estate and stocks have pushed national wealth to record highs in the first quarter of 2024.

This is good news for existing homeowners who are looking to build a nest egg or access funds for future endeavors like retirement or their children's education. However, there's a flip side to this coin.

Many potential homebuyers are feeling left out as affordability becomes a major concern. The dream of homeownership seems to be slipping further out of reach for some, particularly first-time buyers who may not have the benefit of significant down payments saved up.

This price surge creates a gap between what buyers can afford and what sellers are asking, potentially leading to frustration and delayed homeownership for many.

City Spotlight: Where are Prices Rising the Fastest?

If you're looking for a place where sunshine and home values are both on the rise, look no further than San Diego. Home prices there skyrocketed by an impressive 11.1% year-over-year.

This coastal metropolis has always been a popular destination, but the pandemic seems to have fueled its appeal. With more people working remotely and seeking a lifestyle change, San Diego‘s beautiful beaches, mild climate, and outdoor activities have become even more attractive.

Following closely behind San Diego are New York City (9.2%), Cleveland (8.8%), and Los Angeles (8.8%). Interestingly, both New York City and LA, the two largest US cities, have seen a significant rebound since the pandemic.

After a temporary dip in home values early on, they've come roaring back, catching up with the national average. This suggests a strong underlying demand for urban living, with all the cultural attractions, career opportunities, and diverse communities that big cities offer.

Regional Trends: Sun Belt Slowdown, Northeast Sizzles

While some areas are experiencing a scorching hot seller's market, others are seeing a shift in gears. San Francisco and Seattle, once among the hottest markets in the nation, are lagging behind.

Home prices there are still down from their pre-pandemic peaks, possibly due to a combination of factors. The tech industry, a major driver of growth in these cities, might be seeing some stabilization after a period of rapid expansion.

Additionally, these areas are known for their high cost of living, and rising mortgage rates could be putting affordability further out of reach for some potential buyers. This shift in buyer preferences could also be due to a desire for more space or a change of scenery.

Sun Belt cities like Tampa, Phoenix, and Dallas, which were all the rage in 2020 and 2021, are also growing at a slower pace. The pandemic-fueled exodus from urban areas may have peaked, and these Sun Belt destinations might not be quite as attractive to remote workers now that companies are calling employees back to the office, at least part-time.

Meanwhile, the Northeast is sizzling with the fastest price increases in the nation, averaging an 8.3% annual gain. This could be due to a number of factors, including a strong job market, a limited supply of housing inventory, and an influx of buyers priced out of even hotter markets like San Francisco and New York City.

A Glimer of Hope for Buyers

There's a ray of light for those determined to become homeowners. Data from Realtor.com shows a jump in affordable inventory priced between $200,000 and $350,000 – a 41% increase year-over-year in April. Additionally, seller activity is picking up, with new listings rising 12.2% in April compared to last year. This could potentially lead to a more balanced market in the future.

While the increase in inventory is positive news, it's important to remember that overall stock levels are still well below pre-pandemic times. Additionally, recent mortgage rate hikes add another layer of complexity for potential buyers. This upcoming season might still be challenging, but with careful planning and the help of a qualified real estate agent, navigating the market can be a successful journey.

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5 Reasons Real Estate Prices Have Been Rising

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Home prices rose by 0.1% in September from the prior month and by 3.6% from one year ago, the largest gain in six years, according to a report released Monday by Lender Processing Services.

Compared with one year ago, prices are up by 17.7% in Phoenix, the largest gain among the nation’s 40 largest metro areas. Other notable year-over-year increases include Detroit (11.7%), Las Vegas (11.5%), San Jose, Calif. (11.3%), San Francisco (10%), and Sacramento (8.3%).

Among the top 40 metros, only a handful have posted year-over-year declines, led by St. Louis, which was down by 4.1%. Bridgeport, Conn., was down by 2.3%, while Chicago (-0.5%) and Cincinnati (-0.1%) also posted declines.

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65% of Housing Markets Worse Than Four Years Ago

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Sixty-five percent of U.S. housing markets are worse off today than they were four years ago according to the California-based real estate research firm RealtyTrac.

The results of the survey arrive the same day as the final presidential debate and just weeks before the general election.

[Read more…]

National Housing Price Slide May Be Over

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A year after record-setting declines, the slide in national housing prices appears to be nearing an end. CoreLogic projects overall price appreciation of 4.5% over the next 12 months.

National home prices were down less than 1% in January compared to one year earlier, and down 1.9% from the previous month, according to First American CoreLogic’s monthly home price index (HPI).

The 0.7% year-over-year decline in January was better than the 3.4% decrease in December. January’s narrowed decline comes exactly one year after the CoreLogic HPI took its biggest annual decline in the 30-year history of the index.

Excluding distressed sales, prices declined 0.4% year-over-year in January, CoreLogic said. That’s better than 3.3% in December 2009.

CoreLogic projects house prices will continue to decline another 3.7% into the spring before bottoming out in April. After prices begin to stabilize, there will be a modest recovery for the balance of 2010. Excluding distressed sales, prices are projected to decreased only another 0.9%.

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Housing Numbers Err on the Bright Side

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Is it time to buy a house or ?

It Depends…

If you need a place to live and want to own a house, why not? Prices in some areas are fairly reasonable. But if you're speculating, our guess is that you'll get a better deal if you wait.

Why?  House prices may be firming in some areas – that's what the Case-Shiller numbers seem to show. But nationwide, they are probably headed down for quite a while longer.

Here are four reasons why:

First, as you know, this is a depression. It will probably be long. And deep. You wouldn't know it from looking at the stock market or reading the news. The Dow went up another 114 points yesterday. Oil rose to $71. And the dollar – anticipating inflation – fell to $1.44 per euro.

But that's what bounces are supposed to look like. They look good enough so that people mistake them for the real thing… and get suckered into more losses.

This is a depression. Depressions drag down asset prices. Typically, prices become much more reasonable. And then they reach UNREASONABLE levels. House prices have become reasonable. Now they will become unreasonably cheap…

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Why Housing Prices Are Essentially Meaningless

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It took the Wall Street Journal an entire survey to prove what readers of this column have known for months: The housing recovery, as it plays out, will be a localized event, varying greatly city to city, neighborhood to neighborhood, street to street.

The Journal, god bless them, compiled housing data to compare inventory changes, months supply, price drops, unemployment, and default rates across 28 US metro areas. Unsurprisingly, bubble markets like Las Vegas, Phoenix, and Miami look particularly horrid, whereas areas like Dallas (which avoided much of the housing mania) and cities like Charlotte and Seattle (which are just now seeing price declines accelerate) appear to be holding up rather nicely.

But drilling deeper into the raw data reveals a housing market that's deeply bifurcated, even within individual cities.

As low-end markets experience a sharp increase in buying activity due to supply shortages and vastly lower prices, illiquid high end markets are experiencing violent price swings — typically in the southward direction. This much is already known, and the Journal's study simply shows what we're told ad nauseam: is, in fact, local.

What's far more applicable to home buyers and sellers around the country, however, isn't what a few broad (yet important) data points show about what's happening in a few hundred neighborhoods all lumped together. Instead, it's where individual submarkets are headed. After all, owning a home is an investment in a neighborhood, a street, a community — not necessarily a metropolitan area at large.

Housing prices, by extension — when measured as broadly as a metro area — are basically meaningless.

[Read more…]

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