Facebook
X
Pinterest
Copy Link
Right out of the gate this year, it was clear that the U.S. housing market—which saw a historic decline in home sales in the second half of 2022—was no longer in free-fall mode. The market stabilized around January through a combination of improved buyer confidence, tight supply, and slight declines in home prices/mortgage rates doing just enough to improve affordability.
Fast-forward to April, and it’s looking like the housing market hasn’t just stabilized—it might be returning to growth mode. At least that’s according to CoreLogic.
After seven consecutive months of home price declines, the CoreLogic Home Price Index detected a 0.8% home price uptick in February.
Case-Shiller, the gold standard for home price readings, won’t report its February reading until April 25. However, CoreLogic doesn’t feel obligated to wait for the Case-Shiller reading: The Irvine, Calif.–based real estate data firm is ready to call the national home price bottom.
“U.S. home prices rose by 0.8% in February, double the month-over-month increase historically seen and indicating that prices in most markets have already bottomed out,” writes Selma Hepp, chief economist for CoreLogic. “But while housing market challenges remain, particularly in light of mortgage rate volatility and the ongoing banking turmoil, pent-up homebuyer demand is responding favorably to lower rates in many markets.”
Heading forward, CoreLogic’s forecast model expects U.S. home prices to rise 3.7% between February 2023 and February 2024. For perspective, that’d be just a hair under the 4.6% return home prices have averaged annually since 1987.
A closer look at CoreLogic’s U.S. home price forecast
Seasonally Adjusted Case-Shiller U.S. National Home Price Index reading through Jan. 2023
200020022004200620082010201220142016201820202022100200300
WHERE CORELOGIC EXPECTS HOME PRICES BY THE END OF 2023
296.12
CORELOGIC EXPECTS U.S. HOME PRICES TO RISE 3.7% BETWEEN FEBRUARY 2023 TO FEBRUARY 2024
“The divergence in home price changes across the U.S. reflects a tale of two housing markets. Declines in the West are due to the tech industry slowdown and a severe lack of affordability after decades of undersupply. The consistent gains in the Southeast and South reflect strong job markets, in-migration patterns and relative affordability due to new home construction,” writes Hepp.
Not everyone agrees with CoreLogic.
In particular, firms like Fannie Mae and Moody’s Analytics think home prices will fall this year. Heading forward, both firms’ respective forecast models have U.S. home prices falling 4.2% between the fourth quarter of 2022 and the fourth quarter of 2023. The reason? Spiked mortgage rates coupled with the Pandemic Housing Boom’s run on home prices has simply pushed affordability too far beyond fundamentals.
April 11, 2023, 4:01 PM UTC
