CoreLogic: US Annual Home Price Growth Speeds Up in September, Reflecting Early 2023 Gains

• U.S. single-family home prices increased by 4.5% on a year-over-year basis in September, the third month of acceleration and the highest such growth since early 2023.
• Home prices have now increased annually for 140 consecutive months and are up by 42% from the onset of the pandemic.
• Four Western states and Washington, D.C. saw year-over-year home price declines in September.
• Miami continued to lead major U.S. metro areas for annual home price gains for the 15^th consecutive month.
• CoreLogic projects that annual home price growth will continue to rise modestly through January 2024 before relaxing to 2.6% in September 2024.

CoreLogic®, a leading global property information, analytics and data-enabled solutions provider, today released the CoreLogic Home Price Index (HPI^™) and HPI Forecast^™ for September 2023.

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Figure 1: HPI & HPI Forecast % Change YoY (Graphic: Business Wire)

U.S. single-family home prices rose by 4.5% year over year in September, the largest such gain since February. The Northeast continued to post the strongest appreciation, with Maine seeing a 10.1% annual increase, the first double-digit HPI gain recorded in any state since early 2023. Despite mortgage rates that are approaching 8%, inventory constraints and a healthy U.S. job market should help keep price growth moderate but steady over the next year.

“While annual home price growth continued its third month of upward momentum in September, this mostly reflects a comparison with last year’s lows, when prices began to cool from double-digit growth in autumn 2022,” said Selma Hepp, chief economist for CoreLogic.

“Still, given the continued rise of borrowing costs in 2023, it is remarkable to see how resilient home price growth has been in recent months,” Hepp continued, “with September’s 0.3% month-over-month gain lining up with pre-pandemic trends. Nevertheless, as mortgage rates significantly impact affordability, certain markets with continued in-migration from more expensive states are showing renewed buoyancy and outsized monthly price gains.”

Top Takeaways:

• U.S. single-family home prices (including distressed sales) increased by 4.5% year over year in September 2023 compared with September 2022. On a month-over-month basis, home prices rose by 0.3% compared with August 2023.
• In September, the annual appreciation of detached properties (4.7%) was 0.8 percentage points higher than that of attached properties (3.9%).
• CoreLogic’s forecast shows annual U.S. home price gains relaxing to 2.6% in September 2024.
• Miami posted the highest year-over-year home price increase of the country's 20 tracked metro areas in September, at 8.5%. St. Louis saw the next-highest gain (7.9%); followed by Charlotte, North Carolina and Detroit (both 6.6%).
• Among states, Maine ranked first for annual appreciation in September (up by 10.1%), followed by Connecticut (up by 9.5%) and New Jersey (up by 9.2%). Four states and one district recorded year-over-year home price losses: Idaho (-2.6%), Utah (-1.7%), the District of Columbia (-1%), Montana (-0.9%) and Wyoming (-0.1%).

The next CoreLogic HPI press release, featuring October 2023 data, will be issued on December 5, 2023, at 8 a.m. EST.

Methodology

The CoreLogic HPI^™ is built on industry-leading public record, servicing and securities real-estate databases and incorporates more than 45 years of repeat-sales transactions for analyzing home price trends. Generally released on the first Tuesday of each month with an average five-week lag, the CoreLogic HPI is designed to provide an early indication of home price trends by market segment and for the Single-Family Combined tier, representing the most comprehensive set of properties, including all sales for single-family attached and single-family detached properties. The indices are fully revised with each release and employ techniques to signal turning points sooner. The CoreLogic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.

CoreLogic HPI Forecasts^™ are based on a two-stage, error-correction econometric model that combines the equilibrium home price—as a function of real disposable income per capita—with short-run fluctuations caused by market momentum, mean-reversion, and exogenous economic shocks like changes in the unemployment rate. With a 30-year forecast horizon, CoreLogic HPI Forecasts project CoreLogic HPI levels for two tiers — Single-Family Combined (both attached and detached) and Single-Family Combined Excluding Distressed Sales. As a companion to the CoreLogic HPI Forecasts, Stress-Testing Scenarios align with Comprehensive Capital Analysis and Review (CCAR) national scenarios to project five years of home prices under baseline, adverse and severely adverse scenarios at state, metropolitan areas and ZIP Code levels. The forecast accuracy represents a 95% statistical confidence interval with a +/- 2% margin of error for the index.

About Market Risk Indicators

Market Risk Indicators are a subscription-based analytics solution that provide monthly updates on the overall health of housing markets across the country. CoreLogic data scientists combine world-class analytics with detailed economic and housing data to help determine the likelihood of a housing bubble burst in 392 major metros and all 50 states. Market Risk Indicators is a multi-phase regression model that provides a probability score (from 1 to 100) on the likelihood of two scenarios per metro: a >10% price reduction and a ≤ 10% price reduction. The higher the score, the higher the risk of a price reduction.

About the Market Condition Indicators

As part of the CoreLogic HPI and HPI Forecasts offerings, Market Condition Indicators are available for all metropolitan areas and identify individual markets as overvalued, at value or undervalued. These indicators are derived from the long-term fundamental values, which are a function of real disposable income per capita. Markets are labeled as overvalued if the current home price indexes exceed their long-term values by greater than 10% and undervalued where the long-term values exceed the index levels by greater than 10%.

Source: CoreLogic

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About CoreLogic

CoreLogic is a leading provider of property insights and innovative solutions, working to transform the property industry by putting people first. Using its network, scale, connectivity and technology, CoreLogic delivers faster, smarter, more human-centered experiences that build better relationships, strengthen businesses and ultimately create a more resilient society. For more information, please visit www.corelogic.com.

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