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Home prices are starting to reflect the insipid housing market.
After months of weak data indicating that home sales have stalled, home prices are finally starting to reflect the slowdown that began last year.
Home-price appreciation slowed to 6.9% in December, according to the CoreLogic Home Price Index.
The rate of home-price growth is the lowest since the late summer of 2020. Home price growth also slowed by 0.4% from the month before.
Home-price appreciation has slowed from a peak of 20% in April last year, CoreLogic said, which was a series high.
CoreLogic said that the following markets were at the highest risk of home-price declines:
- Salem, Ore.
- Bellingham, Wash.
- Bremerton-Silverdale, Wash.
- Crestview-Fort Walton Beach-Destin, Fla.
- Olympia-Turnwater, Wash.
Part of the reason for the slowdown is due to buyers pulling back.
High mortgage rates and an uncertain economic outlook, particularly with numerous layoffs in the tech sector, hit demand in several housing markets hard, the report said.
Idaho was the only state that saw a year-over-year home price loss of 1%, CoreLogic said. Back in April, the state saw its homes gain 17% in value.
Weaker housing demand
“The continued slowing of home prices at the end of 2022 reflects weaker housing market demand,” Selma Hepp, chief economist at CoreLogic, said in a statement.
“But while prices continued to fall from November, the rate of decline was lower than that seen in the summer, and still adds up to only a 3% cumulative drop in prices since last spring’s peak,” she added.
Hepp expects price deceleration to persist into the spring and the housing market “will probably see some year-over-year declines.”
Drop in rates will help demand
But a recent drop in rates is likely to boost buyer demand, buoying the spring home buying season, she added.
CoreLogic said that home-price appreciation will slow to 3% on an annual basis by December 2023.
The cities that posted the highest year-over-year home price gains include Miami, and Tampa, at 19.5% and 14.1% respectively.
Florida remains the top state with the highest annual home price gains, at 15.2%. Vermont is second on the list at 13.5%, followed by South Carolina, with home price growth of 12.2% year-over-year.
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