The convergence of several market headwinds has led to price growth slowing (and sometimes reversing) in certain parts of the country of late. But overall, gains have remained steep, with the increase in March 2022 representing highest on record, according to CoreLogic.
The company’s Home Price Index (HPI) rose by a staggering 20.9% year over year in March, the highest annualized increase since CoreLogic began tracking the metric in 1976. Compared to the year-over-year gain in March 2021, the increase this year was up 9.8 percentage points.
Month-over-month growth also was high, with the index rising 3.3% from February on a non-seasonally adjusted basis. That’s the largest monthly jump for any March in the history of the HPI as index changes from February to March have averaged 0.6%.
“The annual growth in the U.S. index was the largest we have measured in the 45-year history of the CoreLogic Home Price Index,” said Frank Nothaft, chief economist at CoreLogic. “Couple that price increase with the rapid rise in mortgage rates and buyer affordability has fallen sharply.
“In April, 30-year fixed mortgage rates averaged nearly 2 percentage points higher than one year earlier. With the growth in home prices, that means the monthly principal and interest payment to buy the median-priced home was up about 50% in April compared with last April.”
Many cities are still seeing highly elevated price growth, with Tampa (32.5% yearly gain) and Phoenix (30.4%) posting the largest year-over-year increases among the country’s 20 largest metros. New York and Washington, D.C., both at 9.9%, posted the lowest year-over-year gains among this group.
Florida (31.4%) and Arizona (28.7%) were the states with the largest annualized home-price gains.
CoreLogic expects price growth to slow over the next 12 months, in large part due to the aforementioned headwinds such as rising rates. Still, the company’s HPI forecast calls for annualized growth in the double digits for the remainder of this year. Gains are projected to cool by next year and slow to 5.9% by March 2023.