If you were one of the hopeful would-be homebuyers waiting for home prices to decline in 2023, the latest S&P CoreLogic Case-Shiller Home Price Index may be a rude awakening. The data indicates that home prices rose 1.3% in March compared with February and increased 0.7% in March 2023 compared to March 2022.
The Home Price Index from the Federal Housing Finance Agency also showed home prices rising in March, up 0.6% from February, and up 3.6% in year-over-year comparisons.
The main culprit behind this small increase is the chronic lack of inventory that plagues most of the country. As mortgage rates increased, existing property owners have been thinking twice about putting their homes on the market as they would likely need to forego their relatively affordable mortgages on a new home purchase. With mortgage rates topping 7% in May, it is unlikely that this issue will be solved anytime soon.
Significant Regional Differences
The report also highlights noticeable discrepancies between different regions. “One of the most interesting aspects of our report continues to lie in its stark regional differences,” notes Craig J. Lazzara, managing director at S&P Dow Jones Indices.
Cities in the Southeast continue to lead home price growth. Miami and Tampa in Florida and Charlotte, N.C. were the three cities with the highest year-over-year gains among the 20 cities composite in March with home price increases of 7.7%, 4.8%, and 4.7%,respectively. Meanwhile, pricey West Coast cities suffered sharp declines in year-over-year comparisons, with prices tumbling in the double-digits, led by Seattle at
-12.4% and San Francisco at -11.2%.
“The modest increase in home prices we saw in February accelerated in March 2023. Two months of increasing prices do not a definitive recovery make, but March’s results suggest that the decline in home prices that began in June 2022 may have come to an end,” notes Lazzara. “That said, the challenges posed by current mortgage rates and the continuing possibility of economic weakness are likely to remain a headwind for housing prices for at least the next several months.”
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.
