U.S. home prices posted another record-high year-over-year increase in April, marking the 123rd-straight month of gains, according to the latest CoreLogic Home Price Index (HPI™) and HPI Forecast™ for April 2022, released Tuesday.
Rising mortgage rates drove buyer urgency and the resulting price growth, with about 70% of U.S. homes selling for more than asking price this spring. However, higher mortgage rates will likely also put the brakes on buyer demand in the coming months, causing annual home price appreciation to cool to 5.6% by April 2023.
Key findings:
- S. home prices (including distressed sales) increased 20.9% in April 2022, compared to April 2021. On a month-over-month basis, home prices increased by 2.6% compared to March 2022.
- In April, annual appreciation of detached properties (21.8%) was 4 percentage points higher than that of attached properties (17.8%).
- Annual U.S. home price gains are forecast to slow to 5.6% by April 2023 as rising mortgage rates and affordability challenges impede buyer demand.
- As in March’s HPI, Tampa, Florida logged the highest year-over-year home price increase of the country’s 20 largest metro areas in April, at 33.1%. Phoenix again ranked second, with a 29.7% year-over-year gain. On the lower end of the price growth spectrum was New York, at 9.8%. New York was one of the major U.S. metros that lost population in 2021, which is likely contributing to the sluggish price growth when compared with other areas.
- Florida and Arizona posted the highest home price gains, a respective 32.4% and 28.1%. Tennessee ranked third with a 27.2% year-over-year increase. These three states also saw the nation’s highest annual appreciation in March.
The takeaway:
“The record growth in home prices is a result of a scarcity of for-sale inventory coupled with eager buyers who want to purchase before mortgage rates go higher,” said Patrick Dodd, president and CEO at CoreLogic. “Most buyers who closed on their home in April had locked in their mortgage rate in February or March when rates were lower than today. With 30-year fixed mortgage rates much higher now, we expect to see waning buyer activity because of eroding affordability. Consequently, our forecast projects slowing price growth over the coming year.”
