Several states even recorded annual home price losses.
CoreLogic’s Home Price Index fell for the 12th consecutive month in May as rising mortgage rates continue to deter aspiring homebuyers.
Single-family home price growth slowed to a 1.4% year-over-year pace in May, according to CoreLogic, but appreciation remained positive for the 136th straight month. The last time the index saw annual growth decline to less than 2% was 11 years ago.
“After peaking in the spring of 2022, annual home price deceleration continued in May,” CoreLogic chief economist Selma Hepp said. “Despite slowing year-over-year price growth, the recent momentum in monthly price gains continues in the face of recent mortgage rate increases.”
The annual price growth of attached properties (2.7%) was 1.7 percentage points higher than that of detached properties (1%). CoreLogic’s HPI Forecast showed annual home price gains bouncing back to 4.5% by May 2024.
“Nevertheless, following a cumulative increase of almost 4% in home prices between February and April of 2023, elevated mortgage rates and high home prices are putting pressure on potential buyers,” Hepp added. “These dynamics are cooling recent month-over-month home price growth, which began to taper and is returning to the pre-pandemic average, with a 0.9% increase from April to May.”
Among states, Maine posted the highest annual home price gain in May (+7.2%), followed by New Jersey (+7.1%) and Indiana (+6.9%). Meanwhile, 11 states and one district recorded annual home price losses: Idaho (-8%), Washington (-7.5%), Nevada (-5.6%), Montana (-5.3%), Utah (-4.3%), Arizona (-4.2%), California (-3.5%), Oregon (-3.1%), Colorado (-2.7%), South Dakota (-1.3%), New York (-0.3%) and the District of Columbia (-0.1%).
“Following recent trends, a significant number of Western states saw prices decline in May from the same time in 2022, reflecting out-migration from less-urban locations where people moved during the height of the pandemic and the significant loss of affordability due to those resulting home price surges,” CoreLogic explained in its report. “Northeastern states and Southeastern metro areas continue to see larger home price gains compared with other areas of the country, due to both workers slowly moving back to job centers in some areas of the country and settling in relatively affordable places in others.”