Monthly home price acceleration has begun slowing down in most US metros.
Slowing Trend in Home Price Growth
Despite clocking in at +19.8 annual growth in August as indicated by the latest release of the S&P CoreLogic Case-Shiller Index, home price acceleration is showing signs of cooling after 10 months of annual double-digit price growth. After all, this +19.8% annual price growth in August was the same national price growth rate as July.
Likewise, CoreLogic’s 10-city annual price growth rate slowed from 19.2% in July to 18.6% in August and its 20-city annual price growth rate cooled from 20% in July to 19.7% in August.
Homebuyers are becoming more and more exhausted with limited inventories, bidding wars and the perception that price growth will simply go on and on at an unsustainable pace.
Monthly increases in home prices slowed from 1.8% in June to 1.4% in August. This August monthly price growth increase of 1.4% was the slowest since February 2021.
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Slowing Trend in Monthly Price Gains in CoreLogic’s Indices Over Last 20 Months
Take a look at the comparative monthly changes in all three indices:
Monthly Change August 2021 Peak
National 1.4% 1.8%
10-City Index 0.9% 1.7%
20-City Index 1.2% 1.8%
As of October 26,2021, CoreLogic reported that home price growth within the National Index came in at 1.43%, the 10-City Index at 1.17% and the 20-City Index at 1.17%.
Markets with Stronger Monthly Price Gains in August
Of the 17 market that showed monthly price gains in August, eight of those markets were in the South East including Florida, South Carolina, North Carolina and Georgia.
These warmer climate, affordable markets remain popular with snowbirds and with workers able to continue remote-style working arrangements. In fact, 13 of the top 20 housing markets with the highest monthly gains during August were in Florida.
Continued Slowing of Home Price Growth Predicted into 2022
According to the latest CoreLogic Home Price Index Forecast, the current rate of almost 20% price growth is predicted to slow over the next year. A 2% annual gain in prices is anticipated by September 2022.
Price deceleration may be more prominent in markets where home price growth has outpaced income growth. In Phoenix AZ, the leader in home price growth for 26 consecutive months, home prices may decline about -0.4% next September compared to Phoenix’s current home prices, according to CoreLogic. Other markets expected to see price dips include those in Texas, Wyoming, Louisiana and Idaho.
Thanks to CoreLogic.
