The CoreLogic Market Risk Indicator (MRI), a monthly update of the overall health of housing markets across the country, predicts that Lakeland-Winter Haven, FL is at a very high risk (70%-plus probability) of a decline in home prices over the next 12 months. Provo-Orem, UT; North Port-Sarasota-Bradenton, FL; Cape Coral-Fort Myers, FL and Port St. Lucie, FL are also at very high risk for price declines.
Local households are being priced out of the market, which is expected to slow down price growth until incomes catch up. Since the pandemic started, home prices in Sarasota for example have increased by 64%, compared to a national increase of about 40% during the same period.
U.S. Home Price Growth Continues to Slow in April
Nationwide, single-family home price growth rose by 2% year over year in April. This marked the 135th consecutive month of annual growth but the sixth straight month of single-digit gains, which have slowed from an all-time high of nearly 20% annual appreciation in the spring of 2022.
Numerous economic concerns are contributing to buyer reluctance, including mortgage rate volatility and the related uncertainty surrounding the recent debt-ceiling debate. That said, a continued shortage of homes for sale could keep pressure on housing prices over the next 12 months. CoreLogic projects that home price growth will slow a bit more in 2023 before regaining steam to about 5% annual appreciation by April 2024.
“While mortgage rate volatility continues to cause buyer hesitation, the lack of for-sale homes is putting firm pressure on prices this spring, leading to above-average seasonal monthly gains and a rebound in home prices in most markets. Nevertheless, the recent surge in mortgage rates and continued inflation issues suggest that rates may remain elevated, leading home price appreciation to possibly relax this summer and return to average seasonal gains later in 2023. Still, while slim inventory is pushing prices up once again and constraining affordability, recent trends suggest that home price growth in 2023 will fall in line with the historical 4% annual average.“ – Selma Hepp, Chief Economist for CoreLogic
Methodology
The CoreLogic HPI™ is built on industry-leading public record, servicing and securities real-estate databases and incorporates more than 40 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.