Key Highlights
- CoreLogic US Home Price Insights and Forecasts from January 2021 through December 2021
- CoreLogic Home Price index (HPI) forecasts with 30-year forecast horizon along with market condition indicators
December 2020 National Home Prices
Nationwide, home prices, including distressed sales, increased +9.2% y/y and +1% m/m in December. Home price gains averaged +5.7% in 2020, up from +3.18% in 2019. All four-price tiers in 2020 saw price acceleration. The high-price tier grew +9.5%; the middle-to moderate price tier grew +10.4% the low-to middle tier increased +11% and the low-price tier increased +13%, all y/y.
All states showed annual home price increases in December 2020 with the highest appreciation states being Idaho, Indiana, Maine, Montana and Arizona.
National Home Price Forecast
The CoreLogic Home Price Index (HPI) Forecast indicates that home prices will increase +2.9% y/y and +0.2% m/m. Annual price increases are forecast to slow during Q1 2021 and then increase to +4% in Q4 2021.
While home price growth is expected to slow in the beginning of 2021, average growth for the year is expected to climb to +6.9%.
COVID-Impact on Home Prices
The 2020 housing market far exceeded expectations. The year-over-year gain of +9.2% in 2020 was the highest annual home price gain since February 2014. The 2020 average HPI monthly y/y gains hit +5.7% compared with 2019’s increase of +3.8%.
With pandemic-inspired housing demand surging, home-purchase demand surged as well as record-low mortgage rates spurred first-time buyers to enter the market as buyers. This seemingly boundless home-purchase demand dwindled an already low home supplies to an average of -24% below 2019 inventory levels.
CoreLogic’s HPI Top 10 Metros
The top 10 metros with the largest HPI y/y percentage change in 2020 included:
- Phoenix – +13.7%
- San Diego – +10.4%
- Washington DC- +8.8%
- Denver – +8.4%
- Los Angeles – +7.8%
- Chicago – +7.4%
- Las Vegas – +7.4%
- Houston -+5.7%
- Miami – +5.7%
- Boston – +5.0%
Top Markets at Risk of Home Price Declines in 2021
CoreLogic’s HPI Forecast also draws attention to the ongoing disparities in home price growth across metros. In a market such as Houston, where the oil industry has collapsed and the recent hurricane season hit hard, home prices are forecast to decrease -1% by the end of 2021.
Here is the CoreLogicMarket Risk Indicator (MRI) that offers monthly updates on the overall health of housing markets across the nation:
Metros Risk of Price Declines Confidence Scores
Prescott AZ Very High 50 – 75%
Lake Charles LA Very High 75%+
Beaumont TX Moderate 75%+
Miami FL Moderate 50 – 75%
Modesto CA Moderate 50 – 75%
Thanks to CoreLogic.
