Mortgage rates, which have moved significantly higher this year, don’t discriminate based on where someone lives. But the impact they are having on home price appreciation is very disparate.
Housing markets in western states are mostly in the red, while the strongest home price gains are coming almost entirely in the eastern half of the country.
Nationally, home prices are up 2.5%, according to the CoreLogic Home Price Index. But Colorado is among 11 states where prices have fallen in the past 12 months through July.
Colorado’s 0.6% drop is a fraction of the 5.7% decline in Idaho or the 4.2% decline in Nevada, the two states with the biggest rates of home price depreciation. Montana, Washington, Arizona, Utah, Oregon, Texas, Wyoming and California were the other states in negative territory.
With the exception of New Mexico, every continental state west of Colorado had price increases below 1%, and many states were negative. Every state to the east had much larger gains, led by Vermont, up 8.5%, and New Hampshire and New Jersey, up 7.3% each.
Maine, Indiana, Connecticut, Wisconsin, Missouri, Rhode Island and Ohio were the other top-performing housing markets when it comes to price appreciation.
After bottoming in February, U.S. home prices have been on the rise, growing at a 1.6% annual clip in May and June before accelerating to a 2.5% rate in July, according to CoreLogic.
“Annual home price growth regained momentum in July, which mostly reflects strong appreciation from earlier this year,” said CoreLogic chief economist Selma Hepp in comments accompanying the report.
Higher mortgage rates have slowed additional price surges, but Hepp predicts home prices will continue to grow, only more in line with seasonal patterns.
Metro Denver’s home price index decline of 1.3% was double that seen statewide. But it was below the rates of depreciation seen in Las Vegas, down 4.8%, and Phoenix, down 4.2%.
Looking ahead to the next 12 months, Hepp expects U.S. home prices to rise 3.5%. She puts metro Denver in the camp of gainers, forecasting home price appreciation of 6.3%, even though home prices in the region are rated as “overvalued.”
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The metro areas most at risk of seeing home prices fall over the next 12 months are Provo, Utah; Spokane, Wash.; Cape Coral-Fort Meyers, Fla.; Sarasota-Brandenton, Fla., and Lakeland-Winter Haven, Fla., according to CoreLogic.
Metro Denver’s housing market has the biggest impact on statewide statistics, but some of the biggest swings in home prices usually occur in less populated counties.
Counties with the biggest drops in the median price of a single-family home sold in August were Hinsdale, Kit Carson, Jackson, Rio Grande, Costilla, Lincoln, Sedgwick, Montezuma, Otero and Delta, according to the Colorado Association of Realtors.
The biggest single-family home price increases in the past 12 months occured in Bent, Huerfano, Conejos, Prowers, Pitkin, Grand, Rio Blanco, Saguache and Gunnison counties.
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