“Home price appreciation continues to escalate as millennials entering their prime home-buying years, renters looking to escape skyrocketing rents and deep-pocketed investors drive demand,” said Martell said. “On the supply side, it is also the result of chronic underbuilding, especially of affordable stock. This lack of supply is unlikely to be resolved over the next five to 10 years without more aggressive incentives for builders to add new units.”      

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CoreLogic expects home price growth to slow to a 2.7% pace by July 2022 “as ongoing affordability challenges deter some potential buyers and an expected uptick in new for-sale listings cause a slowdown in home price growth.”

“July’s annual home price growth was the most that we have ever seen in the 45-year history of the CoreLogic Home Price Index,” said Frank Nothaft, chief economist at CoreLogic. “This price gain has far exceeded income growth and eroded affordability. In the coming months, this will temper demand and lead to a slowing in price growth.”