According to the CoreLogic Home Price Index (HPI) and HPI Forecast for March 2023, U.S. home price growth slowed to 3.1% in March, the lowest rate since 2012.
This decline in appreciation is partly due to a lack of affordability and continued inventory shortages in the Western region, as well as a slowing demand for higher-priced homes. CoreLogic predicts that annual home price growth will continue to decline over the spring and early summer due to inflation, slowing job gains and wage growth, potential recession, and interest rates that are still above 5.5%.
However, U.S. home prices (including distressed sales) increased by 1.6% compared to February 2023, twice the average seen between 2015 and 2020, reflecting the lack of inventory in this housing cycle.
Meanwhile, according to the National Association of Realtors (NAR) report that pending home sales in the United States fell for the twelfth consecutive month in March, with a decline of 21.8% year-over-year.
The West region saw the largest drop of 32.2%, followed by the Northeast, Midwest, and South. Three of the four regions also saw declines in contract signings from the previous month.
The pending home sales index level for March was 78.9, down from February’s revised figure of 83.2, and it remained below the 100-level mark for the twelfth consecutive month.
NAR cites inventory constraints as a driving factor, and this has been problematic for the industry for years now with homebuilders increasing housing starts as one of the very few ways the pressure will be alleviated.
