Case-Shiller data points to strong home values amid sluggish sales, tight inventory
Home prices remained resilient in the face of high mortgage rates. However, overall home sales have been slow to rebound compared to last year, despite an increase in inventory.
In March, home prices increased by 1.3% month-over-month, a rate higher than the typical seasonal uptick.
“While home prices appear to remain impervious to high mortgage rates, the overall housing market appears to be stuck in second gear,” CoreLogic chief economist Selma Hepp wrote in a blog post. “Home sales so far this year are only slowly bucking last year’s numbers in most markets despite some increase in inventory.”
“The S&P CoreLogic Case Shiller Home Price Index continues to remain strong due to a scarcity of homes for sale,” A&D Mortgage CEO Max Slyusarchuk added. “However, homebuilder confidence is strong enough to continue building homes, but we hear in some markets that homebuilders still need to offer concessions, such as points buydowns, to secure many home purchases.”
Despite the increase in available homes, the market is experiencing regional variations in inventory and demand. Markets with significant supply gains, such as Florida, Texas, and the Southeast, are seeing cooling demand and slower home price growth.
According to CoreLogic data, New Orleans, Austin, San Antonio, Cape Coral, and North Port are the top five markets with the coolest trends, often due to rising insurance costs and maintenance concerns.
Meanwhile, markets in the Northeast and West with strong home price gains continue to struggle with inventory shortages but maintain high demand. The San Francisco Bay Area, for instance, is seeing home sales gains compared to last year.
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The Case-Shiller Index reported a 6.5% year-over-year gain in March, marking the ninth consecutive month of annual appreciation. Home prices are now up 2.7% compared to June 2022.
The 10-city and 20-city composite indexes also showed their ninth straight months of annual increases, at 8.2% and 7.4% respectively. Cities like New York and Chicago have seen relatively stronger housing markets since mid-2022 as people return to urban living.
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