2022 Home Price Appreciation To Slow After Last Year's Surge

Look for home price appreciation to slow this year after a surge in 2021, said CoreLogic Principal Economist Molly Boesel.

The 18.5% year over year increases in national home prices was the highest 12 -month gain in the CoreLogic Home Price Index since the index began in 1976.

“Consumer desire for homeownership against persistently low supply of for-sale homes created one of the hottest housing markets in decades in 2021 and spurred record-breaking year-over-year home price growth,” Boesel said.

She is predicting during the early months of 2022 the annual growth should remain above 10% while slowing each month and average 9.6% for the full year.

For December, home price growth remained at a high level for all four price tiers in the Index. The lowest price tier increased 20.1% year over year in December 2021, compared with 19.2% for the low- to middle-price tier, 19.4% for the middle- to moderate-price tier and 19.1% for the high-price tier.

Appreciation for detached properties (19.7%) was 1.4 times that of attached properties (14.2%) in December.

The higher growth for detached over attached properties widened after the pandemic began as remote work allowed employees to buy homes further from their office and in areas where property prices and population density are lower and detached housing is more common.

However, Boesel said the gap has narrowed since the spring of 2021 and in December was the smallest in 11 months.

In line with the home price increases, Boesel said late last year single family rents were up 11.5% year-over-year in November.

The increase hit a seventh consecutive record high.

“The November 2021 increase was more than three times the November 2020 increase, and while the index growth slowed in the summer of 2020, rent growth returned to its pre-pandemic rate by October 2020, Boesel noted.

CoreLogic predicted rent growth should continue to be robust in the near term, especially as the labor market continues to improve.