CoreLogic: December Home Price Appreciation Cools to 2-12-Year Low
Year-over-year single-family home price appreciation fell to to 6.9% in December to the lowest rate recorded since summer 2020, said CoreLogic, Irvine, Calif.
The company’s monthly Home Price Index also reported home price growth fell by 0.4% from November; projections indicate another 0.2% decline in January.
The report said the effect of rising mortgage rates on housing demand in 2022 became even more evident in December, with annual home price growth down from a series high of 20% appreciation in April. Only nine states registered double-digit year-over-year price increases in December, compared to 48 that posted double-digit gains in April.
San Francisco and Seattle posted significant home price deceleration in November. Idaho was the only state to register an annual home price loss in December (-1%), compared to its 17% gain recorded in April 2022. Nevertheless, the pandemic-induced migration to suburban, exurban and rural areas may be winding down, as part of the U.S. workforce gradually returns to offices.
“The continued slowing of home prices at the end of 2022 reflects weaker housing market demand, primarily caused by higher mortgage rates and a more pessimistic economic outlook in general,” said Selma Hepp, chief economist with CoreLogic. “But while prices continued to fall from November, the rate of decline was lower than that seen in the summer and still adds up to only a 3% cumulative drop in prices since last spring’s peak.”
Hepp noted some exurban regions that became increasingly popular during the COVID-19 pandemic saw prices jump and affordability erode at the time, but these areas are now seeing major corrections. “And while price deceleration will likely persist into the spring of 2023, when the market will probably see some year-over-year declines, the recent decrease in mortgage rates has stimulated buyer demand and could result in a more optimistic homebuying season than many expected,” she said.
Other report findings:
–In December, annual appreciation of attached properties (7.8%) was 1.3 percentage points higher than that of detached properties (6.5%).
–CoreLogic forecasts show annual U.S. home price gains slowing to 3% by December 2023.
–Miami posted the highest year-over-year home price increase of the country’s 20 largest metro areas in December, at 19.5%, while Tampa, Fl.,a retained the No. 2 spot at 14.1%.
–Florida and Vermont recorded the highest annual home price gains, 15.2% and 13.5%, respectively. South Carolina posted the third-highest gain, with a 12.2% year-over-year increase. Idaho was the only state that saw a year-over-year home price loss, at -1%.