In the face of increasing mortgage rates, home prices across the United States increased by 20.2% year over year in May 2022, according to CoreLogic’s U.S. Home Price Insights. The increase, which includes distressed sales, represents the 16^th consecutive month of double-digit increases. Prices increased by 1.8% from April 2022 to May 2022.

Selma Hepp, CoreLogic’s Deputy Chief Economist indicated that home price growth is slowing, due to the “dampening consequence of higher mortgage rates on housing demand, which was the intention,” she said in a statement. She added that with monthly mortgage expenses up about 50% from just a few months ago, “fewer home buyers are now competing for continually limited inventory.”

The National Association of Realtors (NAR), reporting on figures from Freddie Mac, noted that the 30-year fixed mortgage rate stood at 5.7% by the end of June 2022. “It’s a fact that many households are impacted by higher mortgage rates, as they no longer earn the qualifying income for the median-priced home,” the NAR said.

CoreLogic said that no states posted annual home price declines, while states with the highest year-over-year increases were Florida, Tennessee and Arizona. On the other side, CoreLogic analysts indicated that the Bremerton-Silverdale, WA and Bellingham, WA metros have a high risk of home price decline over the next 12 months.

Hepp said that the home prices forecast is for a “rapid deceleration in the rate of growth over the coming year.” Meanwhile, a decline in overheated buying conditions should lead to better balance between buyer and seller, and a healthier housing market, she said. As a result, motivated buyers could find themselves with less competition and more opportunities in the coming months.