While buyers continue to face elevated home prices in many markets, the national rate of home price growth has fallen year over year, dropping to 3.1% from March 2022 to March 2023. That is the lowest rate of appreciation since March 2012, according to the CoreLogic Home Price Index (HPI) and HPI Forecast, released this week.
Home prices increased by 1.6% on a month over month basis from February 2023 to March 2023, according to the report.
But while home price growth continued to increase in March for the 134th straight month, the level of growth declined across 10 states compared to one year earlier.
The majority of states where home price growth declined were located in the West, reflecting a general lack of affordability and inventory shortages in that region. The states of Arizona, California, Colorado, Idaho, Montana, Nevada, New York, Oregon, Utah and Washington all experienced declines in home prices on an annual basis, according to the report.
Demand for higher-priced homes also slowed compared to the demand for median-priced homes, helping to further depress home price appreciation in the Western region, according to the report.
“While housing markets across the country continue to send mixed signals, prices in many large metros appeared to have turned the corner, with the U.S. recording a second month of consecutive monthly gains,” Selma Hepp, chief economist at CoreLogic, said in a statement. “At 1.6%, the month-over-month increase was twice the average seen between 2015 and 2020.”
In addition to inventory issues, economic factors, like inflation, slowing job gains and wage growth, a potential recession, and higher-than-average interest rates sidelined many potential home buyers. This, in turn, helped to further slow home price appreciation, according to CoreLogic.
“As a result of these conditions, CoreLogic projects that U.S. annual home price growth will continue to decline over the spring and early summer before picking back up later in 2023,” the report states.
Of the nation’s 20 tracked metropolitan areas, Miami saw the highest overall home price increase year over year in March at 14.8%, followed by Tampa at 6.9%.
At the state level, the highest gains in home price appreciation year over year occurred in Vermont (9.9%), Indiana (9.2%), and Florida (8.9%).
Of the states that experienced year-over-year declines in home values, Washington led the pack at 7.4%, followed by Idaho (-3.6%), Nevada (-3.5%), Utah (-3.4%) and California (-3%).
