Home price growth bounces back ahead of spring
Home prices rose in February after seven straight months of decline as demand from the spring homebuying rush and limited inventory for sale lifted prices.
Annual home prices increased by 2% year over year and were up 0.2% month over month in February, the S&P CoreLogic Case-Shiller Home Price NSA Index showed. The 10-City Composite posted an annual gain of 0.4%, down from 2.5% in the previous month. The 20-City Composite saw a 0.4% year-over-year gain, down from 2.6% in the previous month.
"Home price trends moderated in February 2023," said Craig Lazzara, managing director at S&P DJI. "The National Composite, which had declined for seven consecutive months, rose a modest 0.2% in February and now stands 4.9% below its June 2022 peak. The moderation we observed nationally is also apparent at a more granular level."
The top three cities with the highest annual increases were Miami (10.8%), Tampa (7.7%), and Atlanta (6.6%). All 20 cities reported lower prices in February compared to January.
CoreLogic chief economist Selma Hepp commented: "While lower mortgage rates helped entice some potential homebuyers off the sidelines this year, the US housing market continues to face many headwinds, including pessimistic consumer sentiments, fears around recent banking turmoil, the lack of a seasonal spring home supply uptick and continued mortgage rate volatility. Nevertheless, the typical spring demand rush and the continued lack of homes for sale lifted prices in February, following seven months of monthly declines."
"The results released today pre-date the disruptions in the commercial banking industry, which began in early March," Lazzara said. "Although forecasts are mixed, so far, the Federal Reserve seems focused on its inflation-reduction targets, which suggests that interest rates may remain elevated, at least in the near term. Mortgage financing and the prospect of economic weakness are therefore likely to remain a headwind for housing prices for at least the next several months."
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