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Top Markets at Risk of Home Price Decline

Home prices nationwide increased year over year by 19.1% in January 2022 compared to January 2021, according to the new CoreLogic Home Price Insights (HPI) report. On a month-over-month basis, home prices increased by 1.4% in January 2022 compared with December 2021.

The HPI Forecast suggests home prices will increase on a month-over-month basis by 0.2% from January 2022 to February 2022, and on a year-over-year basis by 3.8% from January 2022 to January 2023. Although home prices increased nationwide, no states posted an annual decline in home prices. The states with the highest increases year-over-year were Arizona (28.3%), Florida (27.9%), and Utah (25.2%).

HPT Top US Metros Jan

As larger cities continued to experience price increases in January, the CoreLogic HPI provides measures for multiple market segments based on property type, price, time between sales, loan type (conforming vs. non-conforming), and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.

The top 10 metros with the highest year-over-year change are:

10. Washington (8.9%)
9. Chicago (9.0%)
8. Boston (9.8%)
7. Los Angeles (14.5%)
6. Houston (15.9%)
5. Miami (18.7)
4. Denver (19.1%)
3. San Diego (23.3%)
2. Las Vegas (25.2%)
1. Phoenix (30.2%)

The HPI report is designed to provide an early indication of home price trends, offering an interactive view of Home Price Index products with analysis throughout January 2022, and forecasts through January 2023. The indexes are fully revised with each release and employ techniques to signal turning points sooner. CoreLogic HPI Forecasts with an average 30-year range project CoreLogic HPI levels for two tiers—Single-Family Combined (Attached and Detached) and Single-Family Combined, excluding distressed sales.

Providing measures for multiple market segments, the CoreLogic HPI is based on property type, price, time between sales, loan type (conforming vs. non-conforming), and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.

The graph below shows a comparison of the national year-over-year percent change for the CoreLogic HPI and CoreLogic Case-Shiller Index from 2000 to the present month with forecasts for one year. Both the CoreLogic HPI Single Family Combined tier and the CoreLogic Case-Shiller Index are posting positive, but moderating year-over-year percent changes, and forecasting gains for the next year.

HPI CSI Trend Jan 22

The economic impact on home prices have left consumers looking to buy a home have remained optimistic moving into the new year, with more expecting to buy over the next six months as rapid home price appreciation is forecasted to slow. Despite market and economic challenges such as low inventory, continued buyer competition and declining affordability, potential buyers are ready to move while mortgage rates remain relatively low.

“In December and January, for-sale inventory continued to be the lowest we have seen in a generation,” said Dr. Frank Nothaft, Chief Economist for CoreLogic. “Buyers have continued to bid prices up for the limited supply on the market. However, the rise in mortgage rates since January further eroded buyer affordability and is expected to slow price gains in coming months.”

Though numbers are rising in all regions, the CoreLogic Market Risk Indicator (MRI), a monthly update of the overall health of housing markets across the country, shared their 2022 forecast. Predictions show that Lake Havasu-Kingman, Arizona is at the highest risk of a decline in home prices over the next year (+70% probability). Prescott, Arizona is also at high risk (50-70%), while Bridgeport-Stamford-Norwalk, Connecticut; Hartford, Connecticut; and Bremerton-Silverdale, Washington, are at a moderate risk of a decline (25-50%).

To read the full report, including charts and methodology, click here.

About Author: Demetria Lester

Demetria C. Lester is a reporter for DS News and MReport magazines with more than eight years of writing experience. She has served as content coordinator and copy editor for the Los Angeles Daily News and the Orange County Register, in addition to 11 other Southern California publications. A former editor-in-chief at Northlake College and staff writer at her alma mater, the University of Texas at Arlington, she has covered events such as the Byron Nelson and Pac-12 Conferences, progressing into her freelance work with the Dallas Wings and D Magazine. Currently located in Dallas, Texas, Lester is an avid jazz lover and likes to read. She can be reached at [email protected].

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