CoreLogic [1] has released its latest Home Price Index [2] (HPI) covering May 2023 which found that annual U.S. single-family home price growth slowed yet again for the 12th consecutive month in May, falling to a 1.4% increase year-over-year.
This increase, which still remains in positive territory for the 136th straight month, but the last time the HPI recorded growth under 2% was almost 11 years ago in early 2012.
As for nationwide trends, a significant number of Western states saw home prices decline in May from one year ago, reflecting the trend of out bound migration from less-urban areas (where people flocked to during the pandemic) and the significant loss of affordability.
In the Northeastern and Southeastern metro areas continue to see larger home price gains due to workers migrating there for new job opportunities and relatively affordable housing.
“After peaking in the spring of 2022, annual home price deceleration continued in May,” said Selma Hepp [3], Chief Economist for CoreLogic. “Despite slowing year-over-year price growth, the recent momentum in monthly price gains continues in the face of recent mortgage rates increases.”
“Nevertheless, following a cumulative increase of almost 4% in home prices between February and April of 2023, “Hepp continued, “elevated mortgage rates and high home prices are putting pressure on potential buyers. These dynamics are cooling recent month-over-month home price growth, which began to taper and is returning to the pre-pandemic average, with a 0.9% increase from April to May.”
Top takeaways from the report, as highlighted by CoreLogic include:
- U.S. home prices (including distressed sales) increased by 1.4% year over year in May 2023 compared with May 2022. On a month-over-month basis, home prices increased by 0.9% compared with April 2023.
- In May, the annual appreciation of attached properties (2.7%) was 1.7 percentage points higher than that of detached properties (1%).
- CoreLogic forecasts show annual U.S. home price gains increasing to 4.5% by May 2024.
- Miami again posted the highest year-over-year home price increase of the country's 20 tracked metro areas in May, at 11.8%. Atlanta and Charlotte, North Carolina saw the next-highest gains, both at 4.4%.
- Among states, Maine, ranked first for annual appreciation in May (up by 7.2%), followed by New Jersey (up by 7.1%) and Indiana (up by 6.9%). Eleven states and one district recorded annual home price losses: Idaho (-8%), Washington (-7.5%), Nevada (-5.6%), Montana (-5.3%), Utah (-4.3%), Arizona (-4.2%), California (-3.5%), Oregon (-3.1%), Colorado (-2.7%), South Dakota (-1.3%), New York (-0.3%) and the District of Columbia (-0.1%).
