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.
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.
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).
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.
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