Annual U.S. single-family home price growth slowed for the 12th straight month in May, falling to a 1.4 percent year-over-year increase, according to data released by Irvine, California-based CoreLogic, a global property information, analytics and data-enabled solutions provider.
The last time CoreLogic’s Home Price Index saw annual growth fall to less than 2 percent was in early 2012, but U.S. appreciation still remained positive for the 136th straight month in May, the report said.
Following recent trends, a significant number of Western states saw prices decline in May from the same time in 2022, reflecting out-migration from less-urban locations where people moved during the height of the pandemic and the significant loss of affordability due to those resulting home price surges. Northeastern states and Southeastern metro areas continue to see larger home price gains compared with other areas of the country, due to both workers slowly moving back to job centers in some areas of the country and settling in relatively affordable places in others.
“After peaking in the spring of 2022, annual home price deceleration continued in May,” said Selma Hepp, chief economist at CoreLogic. “Despite slowing year-over-year price growth, the recent momentum in monthly price gains continues in the face of recent mortgage rates increases.”
“Nevertheless, following a cumulative increase of almost 4 percent in home prices between February and April of 2023,” Hepp continued, “elevated mortgage rates and high home prices are putting pressure on potential buyers. These dynamics are cooling recent month-over-month home price growth, which began to taper and is returning to the pre-pandemic average, with a 0.9 percent increase from April to May.”
Released at the same time, the CoreLogic HPI Forecast predicts that annual U.S. home price gains will increase to 4.5 percent by May 2024.