Home Price Appreciation Forecasted To Remain Up By 5-6% in April
New data from American Enterprise Institute (AEI) shows continued HPA
Home price appreciation (HPA) is expected to remain strong through April, according to data from the American Enterprise Institute’s (AEI) Housing Center.
National constant-quality home prices were up 1.1% in February over the month prior and 5.9% from a year ago, the AEI reported.
This is despite the subdued purchase activity and relatively high rates that continue to beset the market.
It’s a strong sellers’ market, analysts observed, and year-over-year HPA is projected to remain up by five to six percent through April.
YOY HPA in February varied greatly in different markets, ranging from -3.7% in Austin (-6.9% inflation-adjusted) to 12.8% in Indianapolis (+9.6% inflation-adjusted).
Prices appreciated more in the Northeast YOY than the South, at 8.9% compared to 4.5%, respectively.
The decline in the South was largely driven by homes being sold at a discounted rate in Florida metros due to Hurricanes Ian and Nicole. To help ensure constant home quality, AEI excluded homes that sold for less than 55% of the property’s Automated Valuation Model (AVM) when estimating the constant quality HPA in these particular metros.
While the West was hit the hardest by rising rates in early 2023 (-3.7% YoY HPA in April), its HPA has now recovered to 5.1% on a year-over-year basis.
Historically, the low price tier HPA has outpaced those in the upper price tiers. This trend continued in February, with the YoY HPA up 7.2% for the low-price tier and 4.5% for the high price tier.