U.S. home prices increased 20.9% in April from a year earlier, another record and the 123rd consecutive month of gains, CoreLogic said Tuesday.
The increase was reported as part of the CoreLogic Home Price Index (HPI) and HPI Forecast for April 2022, released by the global property information, analytics, and data-enabled solutions provider.
According to the report, rising mortgage rates drove buyer urgency and the resulting price growth, with about 70% of U.S. homes selling for more than asking price this spring, CoreLogic said.
Higher mortgage rates, however, will likely also put the brakes on buyer demand in the coming months, causing annual home price appreciation to cool to 5.6% by April 2023, the company said.
“The record growth in home prices is a result of a scarcity of for-sale inventory coupled with eager buyers who want to purchase before mortgage rates go higher,” said Patrick Dodd, CoreLogic president and CEO. “Most buyers who closed on their home in April had locked in their mortgage rate in February or March, when rates were lower than today. With 30-year fixed mortgage rates much higher now, we expect to see waning buyer activity because of eroding affordability. Consequently, our forecast projects slowing price growth over the coming year.”
Some key takeaways from the report:
- U.S. home prices (including distressed sales) increased 20.9% in April 2022 from April 2021. On a month-over-month basis, home prices in April increased 2.6% from March.
- In April, annual appreciation of detached properties (21.8%) was 4 percentage points higher than that of attached properties (17.8%).
- Annual U.S. home price gains are forecast to slow to 5.6% by April 2023 as rising mortgage rates and affordability challenges impede buyer demand.
As in March’s HPI, Tampa, Fla., logged the highest year-over-year home-price increase of the country’s 20 largest metro areas in April, at 33.1%. Phoenix again ranked second, with a 29.7% year-over-year gain.
On the lower end of the price-growth spectrum was New York, at 9.8%. New York was one of the major U.S. metros that lost population in 2021, likely contributing to the sluggish price growth when compared to other areas.
Florida and Arizona posted the highest home-price gains, at 32.4% and 28.1%, respectively. Tennessee ranked third with a 27.2% year-over-year increase. These three states also saw the nation’s highest annual appreciation in March, CoreLogic said.
