In last night’s Closer, we discussed recent trends in apartment and home prices. Case-Shiller data reported yesterday showed home price appreciation ramped back up in December and January with 15% annualized growth. That is a much slower pace compared to the 26% annualized appreciation back at the post-pandemic peak last spring but is still extremely high by any standard.
That appreciation has not been evenly felt across the country though. Since home prices inflected higher in the middle of 2020, four metros have been appreciated by more than 40% while Washington, Chicago, and Minneapolis are up at about half that price. In total, national home prices have risen almost 30% since the surge began or 18% annualized. It is worth noting that this data does not include the massive surge in mortgage rates that started at the end of last year which means that it is very unlikely that housing demand (and therefore home prices) can continue to run at such extreme levels given the huge hit to affordability brought on by higher rates.
Taking a more granular look at various metros, the huge surge in home prices had been more pronounced in lower-tax states relative to higher-tax states. But that trend has been unwinding. Click here to view Bespoke’s premium membership options.