Home News Where home prices are headed in 2023—this map shows CoreLogic’s revised outlook for 392 housing markets

Where home prices are headed in 2023—this map shows CoreLogic’s revised outlook for 392 housing markets

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When stingy Federal Reserve economists say the U.S. housing market is in crisis, “difficult [housing correction”], it would be wise to believe them. When it comes out of Fed Chairman Jerome Powell’s mouth, it’s rather a warning.

Powell is correct: Housing activity continues to plummetbut US house prices are First drop since 2012.

Unlike the housing adjustment of the 2000s, when U.S. home prices fell 27% between 2006 and 2012, the ongoing housing adjustment is not fueled by bad debt or oversupply.Instead, this fix is ​​driven by what luck call “Squeezed Affordability”. of pandemic housing boom43% rise in U.S. house prices for Soaring mortgage rates It just pushed affordability beyond what many borrowers could tolerate.

The only recourse available to ease affordability is to lower either mortgage interest rates or home prices. The last few months have seen the latter.

“Home prices continue to face significant pressure in light of surging borrowing costs,” said Thelma Hepp, deputy chief economist. core logic,To tell Fortunee.[The] With homebuyer demand slowing significantly, house prices will continue to fall, closer to local incomes. “

nationwide, Home prices fall 1.3% from peak in 2022At least, that’s according to the Case-Shiller reading delayed until August. However, markets such as Austin and Reno are down 10.2% and 8.4% respectively, while markets such as Des Moines and Baltimore are holding onto all-time highs. (Here’s a change in the 400 largest markets in the country.)

But what comes next?

To get a better sense of where local house prices are headed in 2023, luck We reached out to CoreLogic to see if the company could provide us with the latest November assessment of the country’s largest regional housing market. , projected income growth, projected unemployment, consumer confidence, debt-to-income ratio, affordability, mortgage interest rates, and inventory levels. CoreLogic then classifies the local housing market into one of five categories, grouped by the likelihood that home prices in that particular market will fall between September 2022 and he September 2023. did. Here are the groups the real estate research firm used for his November analysis:

  • very high: Over 70% chance of price drop
  • high: 50%-70% chance
  • Moderate: 40%-50% chance
  • low: 20%–40% chance
  • very low: 0% to 20% chance

None of the 392 local housing markets measured by CoreLogic have a “very low” probability of a home price decline over the next 12 months. Six other housing markets belong to the ‘low’ group and 33 markets belong to the ‘medium’ group. CoreLogic, on the other hand, categorized 65 markets into the ‘high’ camp and 289 markets into the ‘very high’ odds camp.

The trajectory is clear. The growing list of US regional housing markets where house prices have turned negative year-on-year. To see the shift, compare CoreLogic’s November 2022 rating (see chart above) to May 2022 rating (see chart below).

The November assessment found that 354 markets had a 50% or more chance of being negative year-over-year (i.e., high or very high risk) over the next 12 months. group market). This is up from 335 markets. October There was a greater than 50% chance that home prices would fall. In August, 125 markets were at risk. in July98 markets were at risk. in june, 45 markets were at risk.When Mayonly 26 markets (see chart above) fell into these “high” or “very high” risk camps.

what happened?of house price correction It continues to spread.

Bay Area Technicians’ Newfound Remote Freedom in 2020 Combined with Historically Low Mortgage Rates Makes the Pandemic the Perfect Time to Buy in a “Zoom Town” Like Boise It didn’t take me long to notice.

Initially, pandemic housing boom was making Boise home prices are a far cry from local incomeWell, until then Soaring mortgage rates Upset the math of selling our Santa Clara home and moving to Boise. If the transition slows down, Boise quickly entered a historically sharp adjustment.

Boise, which peaked at 47% year-on-year from July 2020 to July 2021, has already turned negative year-on-year in 2022. In fact, Boise home prices are down 7.1% from his 2022 peak and down 4.3% year-over-year.

To date, only 1% of the US’s 392 largest housing markets are negative year over year. That said, don’t ignore Boise.The big question: the market is Boise fundamentals just got too crazy to fixOr are markets like Boise just correcting first time Is it because their fundamentals got screwed up? Analysis provided by CoreLogic found that 354 markets were at ‘high’ or ‘very high’ risk of negative year-over-year growth in his September 2023, but that the latter could be the case. suggests.

I want to get the latest information housing correction? Follow me please twitter and @News Lambert.

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