Home price appreciation slowed for the second month straight in June, but remains in the high double-digits.
CoreLogic’s Home Price Index found that home prices increased by 18.3% YOY in June, the 125th month of consecutive annual price growth.
This is down from May’s 20.2% YOY increase. CoreLogic attributes the cool-off to reduced buyer demand from rising interest rates and concerns about the economy.
Month-over-month, prices are down 0.6%.
“Signs of a broader slowdown in the housing market are evident, as home price growth decelerated for the second consecutive month. This is in line with our previous expectations and given the notable cooling of buyer demand due to higher mortgage rates and the resulting increased cost of homeownership,” said Selma Hepp, interim lead of the Office of the Chief Economist at CoreLogic.
Mortgage rates plummeted by 24 basis points last week in response to slumping demand after the Fed’s 75-point rate hike.
Recession fears are adding to a dip in homebuyer demand spurned on by soaring prices and rising interest rates.
The U.S. saw its GDP drop for a second consecutive quarter last week which, by one metric, means the economy has entered a recession.
“Nevertheless, buyers remain interested, which is keeping the market competitive — particularly for attractive homes that are properly priced” Hepp added.
Tampa, FL, once again had the highest YOY home price increase (+32.6%) out of the 20 metros analyzed by CoreLogic, followed by Phoenix (+26.1%). But both saw price appreciation slow, in line with the national trend.
Eight states saw greater than 20% YOY price growth in June. The states with the highest home price gains were Florida and Tennessee, 31.8% and 25.8%, respectively, followed by Arizona with 24.9% YOY price appreciation.
Washington, D.C. had the lowest price growth at 3.4%.
Appreciation for detached properties was 2.1% higher than that of attached properties, at 18.7% and 16.6% respectively.
CoreLogic forecasts that YOY price growth will drop to 4.3% by June 2023, closer to the long-run average from 2010 to 2020.