Home Price Index Highlights: December 2021
- National home prices increased 18.5% year over year in December.
- Price appreciation is expected to slow throughout 2022.
National home prices increased 18.5% year over year in December 2021, according to the latest CoreLogic Home Price Index (HPI®) Report. The December 2021 HPI gain was up from the December 2020 gain of 8.9% and was the highest 12-month growth in the U.S. index since the series began in 1976. Price appreciation averaged 15% for the full year of 2021, up from the 2020 full year average of 6%. Home price growth in 2021 started off at 10% in the first quarter, steadily increasing and ending the year with an increase of 18% for the fourth quarter. While home price growth is expected to slow during 2022, the CoreLogic HPI Forecast shows it will remain high in the first half of the year and average 9.6% for the full year.
HPI Growth by Price and Property Type Tiers
CoreLogic analyzes four individual home-price tiers that are calculated relative to the median national home sale price.[1] Home price growth remained at a high level for all four price tiers in December. 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.
CoreLogic also provides the HPI separately for detached — or freestanding — properties and attached -properties (such as condos or townhouses). Appreciation for detached properties (19.7%) was 1.4 times that of attached properties (14.2%) in December. The gap in HPI growth between detached and 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. This gap has narrowed since the spring of 2021 and in December was the smallest in 11 months.
Figure 1: Home Prices Accelerate at All Price Levels
Year-Over-Year Change in HPI by Price Tier
State-Level Results
Figure 2 shows the year-over-year HPI growth in December 2021 for the five highest- and lowest-appreciating states. While all states showed annual increases in HPI in December, appreciation was strongest in Arizona, with appreciation of 28.4%, followed by Florida (+27.1%) and Utah (+25.2%). At the low end, Washington, D.C., saw home prices increase 3.7%, and home prices in New York increased 7%. Population growth in some states added to homebuying demand in 2021, pushing up home prices. Arizona, Florida, Utah and Nevada were all in the top 10 for percentage increase in population growth in 2021[2].
The surge in home price appreciation was felt across the country, with most states showing higher appreciation in December 2021 than in December 2020. Florida had the biggest acceleration in home price growth from December 2020 (+8.4%) to December 2021 (+27.1%). Both Washington, D.C. and Alaska saw a slowdown in annual appreciation.
Figure 2: Appreciation Was Strongest in the Mountain West
States With the Highest and Lowest Year-Over-Year Change in HPI for January 2022
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. The 12-month growth in the CoreLogic National index is forecast to steadily slow over 2022. During the early months of the year the annual growth is projected to remain above 10% while slowing each month.
For more information on home price insights and trends, check out our latest HPI Report.
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[1] The four price tiers are based on the median sale price and are as follows: homes priced at 75% or less of the median (low price), homes priced between 75% and 100% of the median (low-to-middle price), homes priced between 100% and 125% of the median (middle-to-moderate price) and homes priced greater than 125% of the median (high price).
[2] Based on population estimates for July 2020 and July 2021 by Bureau of the Census, released December 21, 2021.
