CoreLogic [1] released the CoreLogic Home Price Index [2] (HPI) and HPI Forecast for February 2022, revealing home price growth recorded a year-over-year increase of 20% nationwide in February, another series high and marking 12 months of consecutive double-digit gains. The CoreLogic HPI Forecast shows national year-over-year appreciation slowing to 5% by February 2023, as rising interest rates are expected to sideline even more buyers.
While prospective buyers outnumber sellers, a record-low number of homes for sale remains the primary culprit for rapid price gains [3]. Additionally, with mortgage rates jumping to three-year highs, existing homeowners now have little incentive to sell and buy a new, more expensive home with a higher mortgage rate.
“New listings have not kept up with the large number of families looking to buy, leading to homes selling quickly and often above list price,” said Dr. Frank Nothaft, Chief Economist at CoreLogic. “This imbalance between an insufficient number of owners looking to sell relative to buyers searching for a home has led to the record appreciation of the past 12 months. Higher prices and mortgage rates erode buyer affordability and should dampen demand in coming months, leading to the moderation in price growth in our forecast.”
Top Takeaways:
- Nationally, home prices increased 20% in February 2022, compared to February 2021. On a month-over-month basis, home prices increased by 2.2% compared to January 2022.
- In February, annual appreciation of detached properties (21.1%) was 4.8 percentage points higher than that of attached properties (16.3%).
- Home price gains are projected to slow to 5% by February 2023.
- In February, Naples, Florida logged the highest year-over-year home price increase at 41.4%. Cape Coral, Florida ranked second, with a 40% year-over-year increase. All four metro areas with the largest annual price gains in February are on Florida’s Gulf Coast. By contrast, two metros in upstate New York posted the lowest home price increases in the country: Ithaca (5.2%) and Elmira (3%).
- At the state level, warmer regions of the U.S. continued to show the largest increases, with Florida showing the country’s strongest price growth at 29.1%. Arizona ranked a close second with 28.6% growth, while Nevada was third, at 25.8% annual appreciation.
The next CoreLogic HPI press release, featuring March 2022 data, will be issued on May 3, 2022, at 8 a.m. ET.