CoreLogic: US Annual Home Price Growth Slows but Still Up by Over 5% in February

• U.S. single-family home prices rose by 5.5% year over year in February and are expected to taper to 3.1% growth by February 2025.
• Four of the top five states with the highest annual home price growth are in the Northeast: New Jersey, Rhode Island, Maine and Connecticut
• The five states where home prices remain furthest from the summer 2022 peak are Idaho, Washington, Utah, Vermont and Montana
• The Miami and San Diego metro areas continued to lead the country for annual growth in February, both at about 10%.

CoreLogic®, a leading global property information, analytics and data-enabled solutions provider, today released the CoreLogic Home Price Index (HPI^™) and HPI Forecast^™ for February 2024.

U.S. annual home price growth remained mostly consistent with numbers seen since last fall in February but finally slowed as the residual impact of comparing gains with weak 2022 home prices wore off. CoreLogic projects that year-over-year home price gains will continue to rise at a slower pace for the rest of 2024, which suggests more certainty for potential homebuyers who have been waiting to get a foot in the door. As noted in the most recent US CoreLogic S&P Case-Shiller Index report, an increase in for-sale inventory also benefits potential homebuyers, though affordability remains a concern, particularly if mortgage rates remain elevated throughout the spring homebuying season.

“Home price growth pivoted in February, as the impact of the January 2023 Home Price Index bottom finally faded,” said Dr. Selma Hepp, chief economist for CoreLogic. “As a result, the U.S. should begin to see slowing annual home price gains moving forward.”

“Nevertheless,” Hepp continued, “with a 0.7% increase from January to February 2024, which is almost double the monthly increase recorded before the pandemic, spring home price gains are already off to a strong start despite continued mortgage rate volatility. That said, more inventory finally coming to market will likely translate to more options for buyers and fewer bidding wars, which typically keeps outsized price growth in check. Still, despite affordability challenges, homebuyer demand appears to favor already expensive, coastal markets with a limited availability of properties for sale.”

Top Takeaways:

• U.S. single-family home prices (including distressed sales) increased by 5.5% year over year in February 2024 compared with February 2023. On a month-over-month basis, home prices increased by 0.7% compared with January 2024.
• In February, the annual appreciation of detached properties (5.8%) was 1.2 percentage points higher than that of attached properties (4.6%).
• CoreLogic’s forecast shows annual U.S. home price gains relaxing to 3.1% in February 2025.
• Miami posted the highest year-over-year home price increase of the country's 10 highlighted metro areas in January, at 10.2%. San Diego saw the next-highest gain at 9.9%.
• Among states, South Dakota ranked first for annual appreciation in January (up by 13.8%), followed by New Jersey (up by 12.5%) and Rhode Island (up by 11.6%). Only Idaho recorded a year-over-year home price loss of -0.1%.

The next CoreLogic HPI press release, featuring March 2024 data, is scheduled to be issued on May 7, 2024, at 8 a.m. EST.

Methodology

The CoreLogic HPI^™ is built on industry-leading public record, servicing and securities real-estate databases and incorporates more than 45 years of repeat-sales transactions for analyzing home price trends. Generally released on the first Tuesday of each month with an average five-week lag, the CoreLogic HPI is designed to provide an early indication of home price trends by market segment and for the Single-Family Combined tier, representing the most comprehensive set of properties, including all sales for single-family attached and single-family detached properties. The indices are fully revised with each release and employ techniques to signal turning points sooner. The CoreLogic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.

CoreLogic HPI Forecasts^™ are based on a two-stage, error-correction econometric model that combines the equilibrium home price—as a function of real disposable income per capita—with short-run fluctuations caused by market momentum, mean-reversion, and exogenous economic shocks like changes in the unemployment rate. With a 30-year forecast horizon, CoreLogic HPI Forecasts project CoreLogic HPI levels for two tiers — Single-Family Combined (both attached and detached) and Single-Family Combined Excluding Distressed Sales. As a companion to the CoreLogic HPI Forecasts, Stress-Testing Scenarios align with Comprehensive Capital Analysis and Review (CCAR) national scenarios to project five years of home prices under baseline, adverse and severely adverse scenarios at state, metropolitan areas and ZIP Code levels. The forecast accuracy represents a 95% statistical confidence interval with a +/- 2% margin of error for the index.

About Market Risk Indicators

Market Risk Indicators are a subscription-based analytics solution that provide monthly updates on the overall health of housing markets across the country. CoreLogic data scientists combine world-class analytics with detailed economic and housing data to help determine the likelihood of a housing bubble burst in 392 major metros and all 50 states. Market Risk Indicators is a multi-phase regression model that provides a probability score (from 1 to 100) on the likelihood of two scenarios per metro: a >10% price reduction and a ≤ 10% price reduction. The higher the score, the higher the risk of a price reduction.

About the Market Condition Indicators

As part of the CoreLogic HPI and HPI Forecasts offerings, Market Condition Indicators are available for all metropolitan areas and identify individual markets as overvalued, at value or undervalued. These indicators are derived from the long-term fundamental values, which are a function of real disposable income per capita. Markets are labeled as overvalued if the current home price indexes exceed their long-term values by greater than 10% and undervalued where the long-term values exceed the index levels by greater than 10%.

Source: CoreLogic

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About CoreLogic

CoreLogic is a leading provider of property insights and innovative solutions, working to transform the property industry by putting people first. Using its network, scale, connectivity and technology, CoreLogic delivers faster, smarter, more human-centered experiences that build better relationships, strengthen businesses and ultimately create a more resilient society. For more information, please visit www.corelogic.com.

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