Home Prices Surge to Another High

Annual home price appreciation continued unabated in January with growth accelerating at its fastest rate in decades and leading to overvaluation in some markets, according to CoreLogic.

CoreLogic’s Home Price Index increased 19.1% in January on an annual basis, the most rapid since its inception in the 1970s, after a year-over-year jump of 18.5% in December. Prices also climbed by 1.4% on a monthly basis as well.

Despite ongoing market and economic challenges, including limited inventory, buyer competition and declining affordability, the appetite for purchases remains elevated this winter, wrote Dr. Frank Nothaft, chief economist at CoreLogic. But he added that signs indicate the hot pace was likely to hit a slight cooldown.

"In December and January, for-sale inventory continued to be the lowest we have seen in a generation. Buyers have continued to bid prices up for the limited supply on the market,” Nothaft said in a press release.

“However, the rise in mortgage rates since January further eroded buyer affordability and is expected to slow price gains in coming months,” he said.

Last week, the Mortgage Bankers Association predicted interest rates will increase to 4.3% by the end of 2022. CoreLogic anticipates that by next January home prices will appreciate at an annual pace of 3.8%.

Learn more