CoreLogic reported that home prices rose 4% annually in December 2019 and are expected to increase 5.2% over the next year. December’s home-price gain was down from the December 2018 increase of 4.4%, but up from November’s 3.5% gain.
Price appreciation averaged 3.6% for 2019, which is a considerable drop from 2018’s average of 5.8%. CoreLogic projects average growth for 2020 to be 4.6%.
CoreLogic’s Home Price Index (HPI) has increased on a year-over-year basis every month since February 2012 and has gained 63% since bottoming out in March 2011.
The overall HPI, as of December 2019, was 9.8 higher than its pre-crisis peak in April 2006.
Homes priced in the lowest tier once again saw the largest increase, with value rising 5.9% annually in December 2019. Prices in the low-to-middle price tier rose 5.2%, the middle-to-moderate-price tier increased 4.4%, and the homes in the highest tier witnessed values rise 3.7%.
Since 2011, homes in the lowest-priced tier gained 97.5%.
Idaho ended the year where it was for most of it—leading the nation in home-price appreciation. Home prices in Idaho rose 9.9% in December. The national average was around 4%.
Home prices in Connecticut rose just 0.2% in December and are 17.2% below their pre-crisis peak. Nevada saw the largest slow-down in home prices, as values rose 3.1% in December—much slower than the 10.5% annual increase in December 2018.
While rising home prices are continuing to hamper affordability for many prospective buyers, the AEI Housing Center submitted a letter to the White House Council on Eliminating Regulatory Barriers to Affordable Housing, saying zoning and land-use regulations are a cause for concern.
“The root cause of the affordable housing shortage is land use and laws, not labor and lumber,” AEI noted in its letter.
The letter continued, saying that in 1921 the federal government was the driving force behind the widespread adoption of zoning and the “near-exclusive shift” to single-family structures.
“The U.S Department of Commerce was complicit in promoting the use of geographically separated zoning districts consisting of one-unit, single-family structures or (ii) multifamily structures, to keep racial and ethnic groups separate,” AEI said.
Additionally, the letter states that beginning in 1934 the Federal Housing Administration took over from the Commerce Department and continued to play a role in using zoning to “keep [African-Americans] and immigrants] in zoning district separate from whites.