by Calculated Risk on 11/02/2021 08:00:00 AM
Notes: This CoreLogic House Price Index report is for September. The recent Case-Shiller index release was for August. The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA).
Demand for homebuying remained strong through the end of the summer. However, the ongoing housing supply shortage has continued to drive up prices, which increased 18% year over year in September, to record highs creating additional challenges for entry into the homebuying market. High demand and low supply levels for entry-level homes, in particular, are sidelining many would-be first-time buyers.
As millennials continue to make up a large part of homebuying demand and flock to tech hubs like Seattle; San Jose, California and Austin, Texas, we may see this challenge intensify. This is reflected in a recent CoreLogic consumer survey, with 47.9% of this cohort stating they cannot afford to purchase a home in their preferred area.
“The pandemic led prospective buyers to seek detached homes in communities with lower population density, such as suburbs and exurbs,” said Frank Martell, president and CEO of CoreLogic. “As we head into 2022, we expect some moderation in the current pattern of flight away from urban cores as the pandemic wanes.”
Nationally, home prices increased 18% in September 2021, compared to September 2020. On a month-over-month basis, home prices increased by 1.1% compared to August 2021.
In September, appreciation of detached properties (19.6%) was 7.4 percentage points higher than that of attached properties (12.2%).