US Home Price Growth Highest in 45 Years
Annual growth in the CoreLogic Home Price Index for March exceeded 20 percent, the largest single-month figure in the index’s 45-year history.
CoreLogic does not believe this trend will continue. Its HPI forecast for March 2022 reads that it will slow to about 6 percent next March, “due in part to rising mortgage rates and higher home prices hampering affordability for some home shoppers,” according to the report.
Nonetheless, this month’s exact figure of 20.9 percent is remarkable. Since February, home prices increased by 3.3 percent.
This potentially final boom month was because those who closed in March “had a good chance of locking in mortgage rates around 4% or slightly lower,” Corelogic reported.
By late April, rates had risen to more than 5 percent, a jump of about 30 percent from the same time last year and a trend that could deter more prospective buyers.
Many Sense ‘the Market Will Adjust’
Frank Aazami, Brand Ambassador Private Client Group at Russ Lyon Sotheby’s International Realty, tells GlobeSt.com that most in the industry senses that ‘the market will adjust.’ “Many locals are holding off on their purchase, others are cashing out their stocks in order to take advantage of this next buyer’s market.
“Should the stock market, inflation, job market and political war fail to heal, we will experience another real estate correction. Of course, for those who are closing on ‘Triple A’ real estate, those values will sustain, and in most cases increase in time, as real estate investment historically have.”
Also, as John Beacham, CEO of Toorak Capital Partners, pointed out, the US under-invested in its housing stock for well over a decade and demand continues to outstrip supply in many markets. “To date, the limited supply, strong employment and wage growth have offset the impact of interest rate increases,” he tells GlobeSt.com.
According to CoreLogic, Tampa registered the highest year-over-year home price increase of the country’s 20 largest metro areas at 32.5 percent; Phoenix was next at 30.4 percent.