• Home prices in some areas are rising due to limited inventory, says CoreLogic's Selma Hepp. 
  • Areas that saw price declines during the pandemic are expected to make a comeback. 
  • Metropolitan areas including Anaheim, Seattle, and Sacramento top the list. 

The housing market started off on a solid footing this year as home prices rose. 

But it's not necessarily because buyers are back in droves. High mortgage rates have kept would-be sellers locked into their current properties, making inventory tight and raising demand for the little that's on the market, says Selma Hepp, the chief economist at CoreLogic. 

In April, prices for single-family homes rose by 2% year-over-year and 1.2% from the previous month, according to CoreLogic's Home Price Index. The increase is above the seasonal monthly average, which has historically been at 0.9%, Hepp added. 

National home prices are expected to grow by 4% this year. But not all markets will fall in line with the average. In fact, there will be a bifurcation in price moves across the nation.

The trend will follow a reversion back to the mean or a return from pandemic-era migration. In the early days of the lockdowns, some markets saw rapid appreciation in home prices while others saw double-digit declines, Hepp said. 

People were moving away from expensive West Coast markets and cities to more affordable areas. Now, markets that saw values increase rapidly are leveling out to be more in line with what the incomes are in those areas, she added.

"When you look long-term, home prices tend to revert back to the rate of growth of income," Hepp said. "And whenever you have a situation where home-price gains exceed income gains, it's likely to readjust at some point because if folks can't afford homes in those markets, then there's no sales activity. That means home prices decline."

On the other end, markets that experienced steep price plunges are expected to make a comeback, especially areas that have low inventory, she said. 

Below is a list of 51 metropolitan areas expected to see the most home prices increase in the next 12 months, beginning from the highest to the lowest.

The data is taken from CoreLogic's HPI which measures the year-over-year changes in single-family home values based on data from all 50 states and over 400 American cities. The index changes are based on repeat sales on the same properties.

Metropolitan area

HPI YOY%

Forecasted YOY%

Anaheim-Santa Ana-Irvine CA Metropolitan Division

-0.73

10.3161

Seattle-Bellevue-Everett WA Metropolitan Division

-10.38

10.0377

Sacramento--Roseville--Arden-Arcade CA Metropolitan Statistical Area

-6.96

9.9691

Oakland-Hayward-Berkeley CA Metropolitan Division

-10.09

9.8245

Portland-Vancouver-Hillsboro OR-WA Metropolitan Statistical Area

-4.58

8.2212

Riverside-San Bernardino-Ontario CA Metropolitan Statistical Area

-1.48

8.1907

San Diego-Carlsbad CA Metropolitan Statistical Area

-2.68

7.9938

Denver-Aurora-Lakewood CO Metropolitan Statistical Area

-2.84

7.7273

Jacksonville FL Metropolitan Statistical Area

5.05

6.7077

Las Vegas-Henderson-Paradise NV Metropolitan Statistical Area

-4.1

6.614

Tampa-St. Petersburg-Clearwater FL Metropolitan Statistical Area

4.69

6.3685

Newark NJ-PA Metropolitan Division

6.59

6.1793

Orlando-Kissimmee-Sanford FL Metropolitan Statistical Area

6.69

6.1298

Los Angeles-Long Beach-Glendale CA Metropolitan Division

-2.82

6.042

West Palm Beach-Boca Raton-Delray Beach FL Metropolitan Division

6.63

6.0164

Cambridge-Newton-Framingham MA Metropolitan Division

0.5

5.9048

Nassau County-Suffolk County NY Metropolitan Division

-0.65

5.7747

Baltimore-Columbia-Towson MD Metropolitan Statistical Area

3.68

5.7685

Fort Lauderdale-Pompano Beach-Deerfield Beach FL Metropolitan Division

7.43

5.5688

Boston MA Metropolitan Division

0.67

5.4016

Phoenix-Mesa-Scottsdale AZ Metropolitan Statistical Area

-3.71

5.264

Miami-Miami Beach-Kendall FL Metropolitan Division

13.17

5.1563

Montgomery County-Bucks County-Chester County PA Metropolitan Division

5.29

5.1486

Washington-Arlington-Alexandria DC-VA-MD-WV Metropolitan Division

0.81

4.9793

Atlanta-Sandy Springs-Roswell GA Metropolitan Statistical Area

4.82

4.9643

Minneapolis-St. Paul-Bloomington MN-WI Metropolitan Statistical Area

-0.12

4.9623

Nashville-Davidson--Murfreesboro--Franklin TN Metropolitan Statistical Area

1.38

4.7932

Virginia Beach-Norfolk-Newport News VA-NC Metropolitan Statistical Area

6.84

4.7326

Detroit-Dearborn-Livonia MI Metropolitan Division

2.64

4.307

Charlotte-Concord-Gastonia NC-SC Metropolitan Statistical Area

4.68

4.218

Milwaukee-Waukesha-West Allis WI Metropolitan Statistical Area

6.15

4.0918

Philadelphia PA Metropolitan Division

1.69

4.0543

St. Louis MO-IL Metropolitan Statistical Area

4.17

3.644

Kansas City MO-KS Metropolitan Statistical Area

4.97

3.5144

Providence-Warwick RI-MA Metropolitan Statistical Area

3.15

3.4637

Chicago-Naperville-Arlington Heights IL Metropolitan Division

3.36

3.4629

Richmond VA Metropolitan Statistical Area

3.81

3.1682

Cincinnati OH-KY-IN Metropolitan Statistical Area

6.07

3.0565

Pittsburgh PA Metropolitan Statistical Area

0.97

2.9902

Warren-Troy-Farmington Hills MI Metropolitan Division

2.03

2.9774

Oklahoma City OK Metropolitan Statistical Area

4.87

2.9635

Cleveland-Elyria OH Metropolitan Statistical Area

4.09

2.7892

San Antonio-New Braunfels TX Metropolitan Statistical Area

1.8

2.4221

New York-Jersey City-White Plains NY-NJ Metropolitan Division

0.78

2.3719

Austin-Round Rock TX Metropolitan Statistical Area

-6.88

2.3515

Columbus OH Metropolitan Statistical Area

4.62

2.3468

Houston-The Woodlands-Sugar Land TX Metropolitan Statistical Area

4.5

2.2728

Indianapolis-Carmel-Anderson IN Metropolitan Statistical Area

6.44

1.9631

Fort Worth-Arlington TX Metropolitan Division

1.04

1.5919

Dallas-Plano-Irving TX Metropolitan Division

2.15

1.2522

The metropolitan areas listed below have the highest probability of seeing price declines in the next 12 months. 

"In these markets, when we look at how much prices exceed local incomes, it has been substantial. And that increases the vulnerability for price declines going forward," Hepp said. 

A table from CoreLogic listing the probability of home price declines.
The CoreLogic HPI


Finally, while mortgage rates can be difficult to predict, Hepp believes we have likely peaked for the year. CoreLogic's expectations are that mortgage rates will gradually decline for the remainder of the year to about 5.8% if the inflation rates continue to decline.