June was the 149th consecutive month that the U.S. saw year-over-year home price gains, but the pace of growth is continuing to cool and is expected to slow down significantly before this time next year.
CoreLogic’s Home Price Insights for August 2024 included a forecast for price behavior over the next 12 months, along with the current state of home price growth.
With the inclusion of distressed sales, home prices nationwide increased 4.7% year-over-year this June, as compared with June 2023. Prices grew by 0.3% in June, compared to May 2024, and the CoreLogic HPI Forecast indicates that home prices will rise another 0.3% in July.
By next summer, however, home prices are expected to have softened, with a predicted increase of 2.3% on a year-over-year basis from June 2024 to June 2025.
“Housing market activity essentially froze at the end of the spring homebuying season as high mortgage rates continued to compress affordability and dissuade potential homebuyers,” commented Dr. Selma Hepp, chief economist at CoreLogic. “The 0.3% gain in prices from the month before was less than half the increase seen between May and June prior to the pandemic when the gains averaged 0.8%. In addition, cooling home prices continued to spread across more markets, and nine states reported a monthly decline, up from three states last month. The April surge in mortgage rates notably weighed on consumer sentiment, and consumers increasingly chose to respond to the anticipation of a lower mortgage rate environment later this year.”
No states posted annual home price declines in June, and the states with the highest increases year over year were Connecticut (8.5%), and New Hampshire (8.2%).
CoreLogic’s Market Risk Indicator (MRI) also zeroed in on markets to watch, where there is a very high probability that home prices will decline in the next 12 months.
At the top of this list is the Palm Bay-Melbourne-Titusville, Fla. metropolitan area, Atlanta-Sandy Springs-Roswell, Ga., Gainesville, Fla., North Port-Sarasota-Bradenton, Fla., and Spokane-Spokane Valley, Wash.
