Welcome back! CoreLogic just announced their latest housing market predictions for the next 12 months. They also provided their forecast for the top five markets where they believe home prices will decrease the most over the next year. I have a lot to share in today’s video, so let’s dive right in.
Review of the Past 12 Months
First, let’s talk about what happened over the previous 12 months and compare it to their forecast from a year ago. Home prices nationwide, including distressed home sales, increased year-over-year by 4.9% in May 2024 compared to May 2023. This is quite close to the forecast posted one year ago, which predicted a 4.9% gain. Hats off to them for such an accurate prediction!
However, this 4.9% increase is actually a slowdown compared to the 5.3% gain recorded from April last year to April this year. On a month-to-month basis, home prices grew by 0.6% compared to the previous month, which is also a slowdown from the 1.1% increase from March to April this year.
CoreLogic’s Forecast for the Next 12 Months
Now, let’s talk about their forecast for the next 12 months. Based on their Home Price Index (HPI), they are predicting a 3% increase year-over-year from May this year to May 2025. This is a slight decrease from their forecast one month ago, which predicted a 3.4% gain. They explain this slowdown is due to the recent surge in mortgage rates causing both slowing home buying demand and prices.
Regional Differences in Home Price Changes
According to CoreLogic, the Northeast continues to lead the country in annual appreciation, with New Hampshire being the only state to post double-digit increases. Meanwhile, the price growth gap between detached houses (single-family homes) and attached houses (condos and townhouses) has widened, likely due to homebuyers’ preference for more personal space to work from home and surging HOA fees due to increasing maintenance costs.
Home Insurance Premiums on the Rise
One significant factor affecting the housing market is the rise in home insurance premiums. According to S&P Global, the average home insurance premium rate for owner-occupied homes increased dramatically in 2023. For example, in Texas, insurance rates jumped by a staggering 23.3%, followed by Arizona with nearly a 22% increase and Utah with a 20% increase. These rising costs make homeownership more challenging and contribute to the overall lack of housing affordability.
Insights from CoreLogic’s Chief Economist
CoreLogic’s Chief Economist stated that while national annual home price growth continues to slow, this trend is observed more in markets where inventory is well below pre-pandemic levels. In contrast, areas like Texas and Florida, which have seen significant inventory increases, are experiencing slower home price growth or even declines.
Top Markets for Home Price Decreases
According to CoreLogic, the top five markets where home prices are expected to decrease the most over the next 12 months are:
- Palm Bay-Melbourne, Florida
- Gainesville, Florida
- Atlanta, Georgia
- Spokane, Washington
- North Port-Sarasota, Florida
Conclusion
Thank you for joining me in today’s video. I hope this analysis provides a clear picture of what to expect in the US housing market in 2025. Don’t forget to like and subscribe for more updates. Have an awesome day, and see you in the next video!