Home-price growth continues to cool and provide relief to priced-out prospective homebuyers throughout the first half of this year, as the latest S&P Cotality Case-Shiller U.S. National Home Price NSA Index saw an “essentially flat” report in April, as characterized by Nicholas Godec, head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices.
The Case-Shiller Index saw home prices grow 0.8% year-over-year in April, the slightest tick up from 0.7% in March. Godec noted that “with inflation accelerating to 3.8% in April, U.S. home values have now declined in real terms for an 11th straight month.”
Month-over-month, the index saw national home prices grow 0.8%. However, after seasonal adjustment, growth actually observed a 0.1% fall.
As Realtor.com® Senior Economist Anthony Smith pointed out, this month’s data reflects sales closed February-April, “a period that began with the most favorable rate environment in over three years” as rates momentarily dipped below 6% back in February.
“Despite the brief window of relief, the spring selling season started slowly before gaining traction: existing-home sales rose 3.2% in May to a five-month high of 4.17 million, and pending home sales climbed 3.8% with a 4.8% year-over-year gain, signs that buyers and sellers are finding more common ground even as affordability headwinds persist,” he continued.
Looking at the city composites, the 10-City Composite fell 0.04% month-over-month after seasonal adjustment (up 1.1% pre-adjustment). The composite was up 1.8% year-over-year, a slight increase from 1.5% in March.
The 20-City Composite was up 0.04% month-over-month after seasonal adjustment (up 1% pre-adjustment). Year-over-year the composite was up 1.1%, also a slight increase from 0.9% in March.
Chicago once again reigned as the accelerating market, recording a 6.5% annual price gain. The Windy City was followed by New York at 3.8% and Cleveland at 3.2%.
As for trends in the other direction, Seattle recorded the largest drop at 2.3%, followed by Denver (-1.8%), Tampa (-1.8%), Dallas (-1.6%) and Phoenix (-1.7%).
Notably, Godec said that the “nearly 9% performance spread between Chicago and Seattle highlights how localized housing trends remain,” something that has been observed across many industry reports as of late.
Smith added that for the more supply-constrained markets, “price growth is likely to hold even as the national picture continues to cool.”
Looking ahead, both Godec and Smith noted that the higher-rate environment is a persistent hurdle to the housing market, with Godec saying that housing is “largely treading water in nominal terms and falling in real terms.”
However, despite the continued challenge, Smith also noted that “listing prices have fallen year-over-year for seven straight months, inventory is running above year-ago levels in many markets, and affordability has continued to subtly improve as incomes outpace home-price gains.”
