While the annual price increases are still extremely aggressive, the monthly gains indicate that the brakes could be activated. CoreLogic says nationally, home prices rose 18.3% in June from a year earlier, the 125th consecutive annual gain, however, the monthly change slowed for the second time. CoreLogic’s May-June Home Price Index (HPI) gain was 0.6% compared to April-May growth of 1.8%.
The company expects a significant slowdown in appreciation over the next year, although this has been their expectation for some time. The CoreLogic HPI forecast indicates that house prices will increase another 0.6% from June 2022 to July 2022, but will only increase by 4.3% by June 2023.
Selma Hepp, Deputy Chief Economist at CoreLogic, said: “Signs of a broader housing market slowdown are evident, as house price growth slowed for the second month in a row. This is in line with our earlier expectations and given the noticeable slowdown in buyer demand due to rising mortgage rates and the resulting increase in the cost of ownership. Nonetheless, buyers still remain interested, keeping the market competitive, especially for attractive homes that are priced right. »
This graph shows a comparison of the national year-over-year percentage change for the CoreLogic HPI and CoreLogic Case-Shiller Index from 2000 to the current month with the forecast one year into the future. We note that the combined CoreLogic HPI single-family level and the CoreLogic Case-Shiller index are showing positive, but moderate year-over-year percentage changes, and forecast gains for next year.
As national price growth slows, eight states are still posting double-digit gains, all but one (South Dakota) located in the Sun Belt. The states with the largest year-over-year increases were Florida (31.8%), Tennessee (25.8%) and Arizona (24.9%). Phoenix was the top growing metro area at 26.1% year over year.
CoreLogic warns that several metro areas rank highest in the likelihood of lower home prices over the next 12 months. Its Market Risk Indicator (MRI) puts Bremerton-Silverdale, Washington at a very high risk (over 70% chance) of such a decline. Two other Washington metros, Bellingham and Olympia-Tumwater, as well as Boise City, Idaho and Crestview-Fort Walton Beach-Destin, Florida, are also at more than 70% risk.