Job Growth Drives Home Price Gains in December, CoreLogic Reports
(Illustration courtesy of CoreLogic)
CoreLogic, Irvine, Calif., reported annual U.S. home price growth increased to 5.5% in December, the highest rate of appreciation recorded since January 2023.
Year-over-year U.S. home prices have recorded annual gains since early 2012, CoreLogic said in its latest Home Price Index report. Last year, the average CoreLogic Home Price Index gain was 3.9%, down from 14.5% in 2022 but the same as the annual average in 2019.
“U.S. annual single-family home price growth continued its gradual upward momentum in December 2023 to 5.5%,” the report said. “Northeastern states still saw the largest gains, although no states or districts posted year-over-year losses, the first time that the latter trend has been observed since late 2022.”
CoreLogic noted a healthy job market continues to drive mortgage performance and housing demand. The Bureau of Labor Statistics reported last week that the country added 353,000 new jobs in January. These economic and housing market dynamics are happening while the inventory of homes for sale remains slim.
“Last winter’s mortgage rate surge impacted seasonal home price changes in many markets and suggests that annual gains may have reached the cycle peak and will level off in the coming months,” said Selma Hepp, chief economist for CoreLogic. “But while appreciation is projected to slow, home prices will continue to extend to new highs entering the typically busy spring homebuying season.”
While the recent dip in mortgage rates help improve some affordability challenges, additional rate declines may not arrive until the second half of 2024, Hepp cautioned.
“The 2024 homebuying season should enjoy a boost because of pent-up demand, as well as a robust job market and wage growth,” Hepp continued. “Geographic patterns in price gains continued to favor housing markets in the Northeast and the South, especially those that remain more affordable and have lagged in home price increases over the past couple of years.”
