If you have been waiting in the starting blocks hoping for a break in home prices, you may need to wait a while longer. According to the latest indicators, home prices continued their slow climb back in April. Data from the S&P CoreLogic Case-Shiller Indices indicate that housing prices increased on a month-over-month basis in all 20 major metro markets for the third consecutive month. After seasonal adjustment, the national index rose 0.5% in April from March. On an annual basis home prices fell 0.24%. (However, the annual decline reflects price drops that occurred in 2022, according to the S&P report).
Meanwhile, according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI), U.S. home prices increased by 0.7% from March to April 2023, rising 3.1% in year-over-year comparisons.
However, indicators also identify some stark differences between regions. According to the S&P Case-Schiller Index, Miami (+5.2%), Chicago (+4.1%), and Atlanta (+3.5%) recorded the highest year-over-year gains, while Seattle (-12.4%) and San Francisco (-11.1%) continue their race towards the bottom. The FHFA HPI similarly highlights between pricier areas, particularly the coastal cities on the west coast, and areas that remain relatively more affordable. Seasonally adjusted monthly price changes from March 2023 to April 2023 ranged from +0.1% in the Pacific division to +2.4% in the New England division. The 12-month changes ranged from -3.8% in the Pacific division to +6.1% in the East South Central division.
Waiting for a Break
“The U.S. housing market continued to strengthen in April,” reports Craig Lazzara, managing director at S&P Dow Jones Indices. “Home prices peaked in June 2022, declined until January 2023, and then began to recover. If I were trying to make a case that the decline in home prices that began in June 2022 had definitively ended in January 2023, April’s data would bolster my argument.”
“Home price trends are caught in a tug of war between stretched buyer budgets and limited inventory forcing competition despite reduced affordability,” adds Realtor.com’s chief economist Danielle Hale. “With high mortgage rates keeping 1 in 7 homeowners from selling, new listings have lagged far behind what we’ve seen in prior years, pushing buyers to continue to bring their best offers even as home sales are 20% lower than at this time last year.”
The tight market conditions have contributed to persistently elevated home prices despite the toll taken on house shoppers’ pocketbooks by ten successive interest rate increases. However, Lazzara remains cautious. “Whether we see further support for that view in coming months will depend on how well the market navigates the challenges posed by current mortgage rates and the continuing possibility of economic weakness,” he adds.
We’ll keep you updated on further developments. In the meantime, if you’d like more information about buying/selling or refinancing in today’s market, give us a call or drop us an email.
