While Buyer Demand Cools, Home Prices Dropped by 0.5% in September from the Previous Month

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While Buyer Demand Cools, Home Prices Dropped by 0.5% in September from the Previous Month

U.S. home price growth continued to relax on a year-over-year basis in September, posting an 11.4% increase. As in previous months, Southeastern states put up significantly higher price gains than the national growth rate, with Florida again leading the country for the eighth consecutive month. Although rising mortgage rates continue to dampen housing demand nationwide, out-migration from more expensive states on the West Coast and in the Northeast  is likely fueling homebuyer enthusiasm for properties in relatively more affordable Southeastern states. CoreLogic expects annual U.S. home price growth to continue to slow over the next 12 months to 3.9% by September 2023.

“The rapid increase in prices during the COVID-19 pandemic caused many U.S. housing markets to reach completely unaffordable levels for potential local homebuyers,” said Selma Hepp, interim lead of the Office of the Chief Economist at CoreLogic. “On the West Coast and in Mountain-West states, home prices are slowing from this spring’s high but remain elevated from a year ago. By contrast, markets that continue to see an in-migration of higher-income households are still experiencing home price gains that are notably higher than the national rate of appreciation.”

Top Takeaways:

  • U.S. home prices (including distressed sales) increased 11.4% year over year in September 2022 compared to September 2021. On a month-over-month basis, home prices declined by 0.5% compared to August 2022.
  • In September, annual appreciation of detached properties (11.5%) was 0.4 percentage points higher than that of attached properties (11.1%).
  • Annual U.S. home price gains are forecast to slow to 3.9% by September 2023.
  • Miami posted the highest year-over-year home price increase of the country’s 20 largest metro areas in September, at 25.6%, while Tampa, Florida remained in the No. 2 slot at 23.2%.
  • Florida and South Carolina posted the highest home price gains, 23% and 17.6%, respectively. Tennessee ranked third with a 17.4% year-over-year increase. Washington, D.C. ranked last for appreciation at 1.8%.
Figure 1: HPI and HPI Forecast Percentage Change Year Over Year
Table 1: Single-Family Combined HPI Percent Change and Market Condition Indicators for Select Metros
Table 2: Top Market at Risk of Home Price Decline

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