While home prices increased 19.1% in January, compared to a year ago, consumers looking to purchase 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.
This, according to the latest CoreLogic Home Price Index (HPI) and HPI Forecast for January 2022, released this week.
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, according to the report.
Key findings:
- Nationally, home prices increased 19.1% in January 2022, compared to January 2021. On a month-over-month basis, home prices increased by 1.4% compared to December 2021.
- In January, annual appreciation of detached properties (20.3%) was 5.1 percentage points higher than that of attached properties (15.2%).
- Home price gains are projected to slow to a 3.8% annual increase by January 2023.
- January marked the second consecutive month Naples (38.9%) and Punta Gorda (38.3%), Florida, logged the highest year-over-year home price increases.
- At the state level, the Mountain West and Southern regions continued to dominate the top three spots for national home price growth, with Arizona leading the way at 28.3%. Florida ranked second with a 27.9% growth and Utah followed in third place at 25.2%.
The takeaway:
“In December and January, for-sale inventory continued to be the lowest we have seen in a generation,” said Dr. Frank Nothaft, chief economist at 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.”
