While CoreLogic forecasts national home prices will increase 3.2% from August 2022 to August 2023, the organization’s forecast model estimates 238 of 392 analyzed markets have “very high” odds of falling home prices over the next 12 months, according to Fortune. Factors considered in CoreLogic’s forecast include income growth projections, unemployment forecasts, consumer confidence, debt-to-income ratios, affordability, mortgage rates, and inventory levels.
The trajectory is clear: Falling home prices are getting more and more likely.
There are two main reasons CoreLogic’s outlook continues to go lower. 1. Housing data, which feeds into the forecast model, continues to weaken in the face of deteriorating housing affordability. 2. Home prices are already falling in many markets.
“With some markets already posting month-to-month declines since this year’s peak in prices, probability of price decline on a year-over-year basis intensified as well in August,” Selma Hepp, deputy chief economist at CoreLogic, tells Fortune.
Where are home prices falling the fastest? The biggest declines are occurring in the West Coast, Southwest, and Mountain West markets.
“Markets already posting monthly declines are generally concentrated in the West and Mountain West, particularly in Washington, Idaho, California, Utah, Colorado, Oregon, Montana, Nevada, and Arizona, and have seen relatively larger run-up in prices since the onset of the pandemic,” Hepp says.
