Housing Market Cooldown Reaches 13th Consecutive Month Despite Signs Streak May Not Last

Sharply Falling Mortgage Rates Likely to Bust Streak

By Ralph McLaughlin Housing Affordability, Real Estate

According to the latest S&P CoreLogic Case-Shiller National Home Price Index, home prices in the United States grew by 3.5% in April. This is the 13th consecutive month of slowing home-price growth, which is now at its lowest level of growth since September 2012. However, there are signs the streak may not last, as half of the 20-cities have reversed course and witnessed a quickening of price increases in April.

Price Growth Slows for 13th Straight Month

The slide in average home prices for the top 10 metropolitan areas broke its 12-month cooling with an increase of 2.3%, up from the previous month’s 2.2% increase. However, the top 20 metropolitan areas cooled for the 13th straight month, posting a gain of 2.5% year over year, down from 2.6% in March. Just 10 of the top 20 metropolitan areas reported lower price increases compared to the previous month, with the other half of the metros actually experiencing a pickup in their home price appreciation. This is in sharp contrast to March, when 18 of the top 20 saw a decrease from the previous month.

10 and 20 City Growth Rate Lowest Since 2012

Las Vegas (7.1%), Phoenix (6%) and Tampa (5.6%) accounted for the highest year-over-year price increases, while metros with the largest slowdown from the previous year continue to be along the Pacific: Seattle (13% point drop), San Francisco (9.1% point drop) and San Diego (6.8% point drop).

Pacific Markets Lagging U.S. Home Price Growth
However, the continued fall in 10-year treasury yield - which has helped push mortgage rates down to levels not seen since 2017 – appears to be stemming the housing market cooldown, with just as many markets warming as cooling. As such, we expect the slowdown to reverse course sometime over the next few S&P releases, with May or June’s release showing the first increase in national home prices since early 2018.

Seattle at Risk of Falling Prices

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