Home prices continued to show strong growth from a year earlier, increasing 18.1% in November from a year earlier, but the housing market cooled a bit with prices rising just 1.2% from October.
That’s the insight shared by CoreLogic, a global property information, analytics and data-enabled solutions provider, which today released its CoreLogic Home Price Index (HPI) and HPI Forecast for November 2021.
The company said that while 2021 was a record-breaking year for U.S. home price growth, for many prospective buyers the hot housing market will continue to exacerbate ongoing affordability challenges into the new year — and beyond.
CoreLogic said home price growth remains at historic highs, but is projected to slow over the next year. Still, economic growth and inflation will most likely lead to increases in mortgage rates, which will further erode affordability, the company said.
"Over the past year, we have seen one of the most robust seller's markets in a generation,” said Frank Martell, CoreLogic president & CEO. “While increased interest rates may help cool down homebuying activity, we expect 2022 to be another strong year with continuing upward price growth."
Some key takeaways:
- Nationally, home prices increased 18.1% in November 2021, compared to November 2020. On a month-over-month basis, home prices increased by 1.3% compared to October 2021.
- In November, annual appreciation of detached properties (19.4%) was 5.8 percentage points higher than that of attached properties (13.6%).
- Home price gains are projected to slow to a 2.8% increase by November 2022.
- In November, Naples, Fla., logged the highest year-over-year home price increase at 36.7%. Twin Falls, Idaho, had the second-highest ranking at a 33.3% year-over-year increase.
- At the state level, the Southeast and Mountain West regions continued to dominate the top spot, with Arizona leading with the strongest price growth at 28.6%. Florida ranked second with a 25.8% growth, pushing Idaho from second to third place at 25.5%.
“Interest rates on 30-year fixed-rate mortgages averaged a record low of 2.96% during 2021, helping to keep monthly payments low in the face of record-high home prices,” said Frank Nothaft, Ph.D., chief economist at CoreLogic. “However, the Federal Reserve appears poised to allow interest rates to rise in 2022. Higher rates will intensify buyer affordability challenges, especially in overvalued local markets.”
The CoreLogic HPI is built on public record, servicing and securities real-estate databases and incorporates more than 45 years of repeat-sales transactions for analyzing home price trends.
