Residential Real Estate News
Annual Home Price Growth in U.S. Reaches Fever Pitch in August
U.S. home prices rose at history making rates this summer, shattering 45 year record
According to CoreLogic's latest CoreLogic Home Price Index for August 2021, U.S. home prices rose to a fever pitch this summer, with annual price gains reaching another all-time high in August 2021 at 18.1%.
Ongoing affordability challenges within the supply-constricted market have also been exacerbated by an influx in homebuying activity from investors. As the home purchase market continues to boom and buoy the post-pandemic economy, these market factors are unevenly affecting access for some buyers.
This is reflected in a recent CoreLogic consumer survey, where 59% of consumers looking to purchase a home reported combined household earnings of at least six figures, compared to the 10% of consumers looking to purchase earning less than $50,000.
"Home prices continue to escalate at a torrid pace as a broad spectrum of buyers drive demand for a limited supply of homes," said Frank Martell, president and CEO of CoreLogic. "We expect to see the trend of strong price gains continue indefinitely with large amounts of capital chasing too few assets."
"Single-family detached homes continue to be in high demand," said Dr. Frank Nothaft, chief economist at CoreLogic. "These properties offer more living space and distance from neighboring homes than that of attached properties. On average, detached homes have 28% more inside space compared to single-family attached properties and about twice as much space as apartments in multifamily structures."
Top Market Takeaways in August 2021:
- Nationally, home prices increased 18.1% in August 2021, compared to August 2020. This is the largest 12-month growth in the U.S. index since the series began (January 1976 - January 1977). On a month-over-month basis, home prices increased by 1.3% compared to July 2021.
- In August, appreciation of detached properties (19.8%) was again the highest measured since the inception of the index and 7.8-percentage points higher than that of attached properties (12%).
- Home price gains are projected to slow to a 2.2% increase by August 2022, as ongoing affordability challenges deter some potential buyers.
- In August, home prices rose sharply in the Pacific Northwest with Bend, Oregon, experiencing the highest year-over-year increase at 37.2%. Twin Falls, Idaho, ranked second with a year-over-year increase of 35.8%.
- At the state level, Idaho and Arizona again led the way with the strongest price growth at 32.2% and 29.5%, respectively.
