Home prices edged up by 1.6% year over year in June, another small increase that could nonetheless be a noteworthy bellwether for future price gains, according to CoreLogic.
The analytics company’s latest Home Price Index (HPI) report revealed that annual home price growth stayed near its 11-year low point of 1.4%, hit just one month prior. But that improvement from May, however mild, may signal that yearly appreciation could be bottoming out.
Headwinds remain, most immediately in the form of interest rates that are once again trending upward, potentially discouraging demand. That’s a dynamic that may be playing out as month-over-month price growth has cooled, from 1.6% in March and 1.2% in April to 0.9% in May and 0.5% in June. Still, CoreLogic anticipates home price growth on an annual basis to gain steam for the rest of the year, increasing to 7% in 2024. The CoreLogic HPI forecast calls for 4.3% home price growth between June 2023 to June 2024, as well as for monthly appreciation to turn the corner and inch back to 0.6% from June 2023 to July.
“While the continued imbalance between buyers and sellers continues to pressure home prices, June’s annual bump in price growth echoes economic resiliency, a thriving U.S. job market and strong consumer spending,” said Selma Hepp, chief economist at CoreLogic. “And while higher mortgage rates are impacting affordability for buyers with loans, almost four in 10 sales are all-cash transactions. Also, most baby-boomer homeowners have substantial equity, which could be putting pressure on prices in markets where that generation is currently migrating.”
Geographically, year-over-year appreciation remains a tale of two sides of the country. Thirteen states, along with the District of Columbia, logged annual price growth in June of less than 1%. Ten states (again, plus the District of Columbia) saw negative annual appreciation. Of the 10 that posted yearly drops, all but one were west of the Mississippi: Arizona, California, Colorado, Idaho, Montana, Nevada, Oregon and Utah. New York was the lone state on the eastern seaboard that saw annual depreciation.
This demarcation bears out on the city level as well, with San Diego (-0.9%), Los Angeles (-2.4%), Denver (-2.6%), Phoenix (-5.5%) and Las Vegas (-5.5%) all saw annual price decreases. In the Sun Belt, meanwhile, Miami saw a year-over-year price jump of 8.9%, easily the largest among major metros tracked by CoreLogic.
