Home price appreciation is now half of what it was in April, its lowest recorded point since early 2021, according to new data from CoreLogic.
October’s CoreLogic Home Price Index recorded a 10.1% increase YOY. Though still elevated, it continues to decrease from record highs earlier this year. The coming months are expected to push growth back into single digits.
Month-over-month, prices were down 0.1% from September.
Low inventory, waning buyer purchase power, and economic uncertainty are at the heart of the issue, CoreLogic leaders say.
Price growth is expected to cool through next spring when the housing market may go negative before slowly rebounding in the latter half of 2023. CoreLogic predicts appreciation will be 4.1% next October.
“Following the recent mortgage rate surge above 7%, real estate activity and consumer sentiment regarding the housing market took a nosedive,” said Selma Hepp, interim lead of the Office of the Chief Economist at CoreLogic.
“However, while some housing markets have seen significant recalibration since the spring price peak and are likely to post losses in 2023, further deteriorating for-sale inventory, some relief in mortgage rate increases and relatively positive economic news may help eventually stabilize home prices.”
Rates have fallen in the last few weeks, dipping to 6.49% last week, giving some analysts hope that they’ve reached their peak.
“We probably have seen peak mortgage rates unless there is some other major shock to the economy,” Cris deRitis, deputy chief economist at Moody’s Analytics, told NextAdvisor.
Purchase loan volume has been inching up as anxious buyers try to take advantage of sub-7% rates.
But demand is still suppressed. Sellers who regret not putting their house on the market earlier are delisting their homes due to low offers, preferring to keep their historically-low interest rates from last year if they can’t make a profit on a sale.