In a new report, CoreLogic has announced the CoreLogic Home Price Index (HPI) and HPI Forecast for January 2024.
January was the highest annual rate of increase in home prices, but growth is predicted to slow down in the upcoming months and drop to 2.6% by early 2025. The nation’s long-standing housing affordability issue is being made worse by both rising mortgage rates and a lack of available inventory, which primarily impacts regions with historically lower earnings.
“U.S. annual home price growth strengthened to 5.8% in January 2024,” said Dr. Selma Hepp, Chief Economist for CoreLogic. “And while the acceleration continues to reflect the residual impact of strong appreciation in early 2023, the annual rate of growth is expected to taper off in coming months.”
Key Findings of the CoreLogic HPI/HPI Forecast:
- U.S. single-family home prices (including distressed sales) increased by 5.8% year-over-year in January 2024 compared with January 2023. On a month-over-month basis, home prices increased by 0.1% compared with December 2023.
- In January, the annual appreciation of detached properties (6%) was 1.1 percentage points higher than that of attached properties (4.9%).
- CoreLogic’s forecast shows annual U.S. home price gains relaxing to 2.6% in January 2025.
- Miami posted the highest year-over-year home price increase of the country’s 10 highlighted metro areas in January, at 10.2%. San Diego saw the next-highest gain at 8.5%.
- Among states, Rhode Island ranked first for annual appreciation in January (up by 13.2%), followed by New Jersey (up by 11.6%) and Connecticut (up by 11%). No states recorded year-over-year home price losses.
Many younger Americans are finding a way to become homeowners despite financial worries. Between 2020 and 2023, millennials are expected to make up more than half of all home purchase applications. The fact that baby boomers, who already have substantial savings, may pay for homes totally with cash adds to the difficulties faced by other buyers.
“Home prices further increased in late 2023 despite high mortgage rates, which surged to the highest level since the beginning of the millennium,” Hepp said. “But metro areas that have struggled with the impact of higher rates continue to see downward movement on home prices. Generally, pressures from higher mortgage rates tend to occur in markets where the higher cost of homeownership pushes against the affordability ceiling.”
In January 2024, the national average price of homes—including distressed sales—rose 5.8% year-over-year from January 2023. In January 2024, house prices fell by -0.1% from December 2023 on a month-over-month basis.
The CoreLogic HPI Forecast indicates that home prices will remain unchanged from January 2024 to February 2024 and increase by 2.6% on a year-over-year basis from January 2024 to January 2025.
The next CoreLogic HPI press release, featuring February 2024 data, is scheduled to be issued on April 2, 2024.
To read the full report, including more data, charts, and methodology, click here.
