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United States home price growth continued its freefall during January new data shows, dropping for the ninth straight month.
Annual home price growth dropped to 5.5 percent for the first month of 2023, according to data released Tuesday through the CoreLogic Home Price Index. On a month-over-month basis, home prices declined o.2 percent.
Three states in the Northwest — Idaho, Washington and Montana, as well as Washington D.C., actually posted year-over-year declines as migration patterns that emerged during the pandemic slowed, according to CoreLogic, with prices in those states falling 2.3 percent, 2.2 percent, 0.6 percent and 0.1 percent respectively.
The states with the highest annual price gains were Florida and Maine, rising 13.4 and 11.5 percent respectively.
The metro area that posted the highest annual increase was Miami, where prices rose by 17.3 percent. Tampa prices followed, rising 11.7 percent.
January saw a period of increased activity in the housing market as mortgage rates fell to around 6 percent. That period was short-lived though as they began to climb again in February.
“While 2023 kicked off on a more optimistic note for the U.S. housing market, recent mortgage rate volatility highlights how much uncertainty remains,” said Selma Hepp, chief economist at CoreLogic. “Nevertheless, the continued shortage of for-sale homes is likely to keep price declines modest, which are projected to top out at 3% peak to trough.”
Slowed price growth and strong salary growth may combine to boost affordability, especially for first-time buyers who Hepp predicted will become an increasingly important factor in the market as they have no lower mortgage rate on their current home they are locked in to.
“Home price depreciation and strong income growth are expected to boost affordability, which is particularly important for first-time buyers,” Hepp continued. “This group has accounted for a higher share of mortgage applications since last summer, as first-time buyers don’t need to surrender an extremely low mortgage rate like current homeowners.”
The CoreLogic HPI forecast also released Tuesday, predicted that annual home price growth will slow to 3.1 percent by January 2024.
The slowing rate of home price growth comes as separate data released Friday by Redfin shows home sale prices posted an annual decline in February when sale prices fell 0.6 percent — the first annual decline recorded in over a decade brought on by steep mortgage rates pricing many buyers out of the housing market.
