House price downturn comes to an end
But two months of increasing prices do not make a definite recovery, CoreLogic says.
House price appreciation accelerated on a monthly basis in March, according to the latest CoreLogic S&P Case-Schiller Index.
Month over month, the national home price index gained 1.3% on a seasonally unadjusted basis, while the 10-City and 20-City Composites saw increases of 1.6% and 1.5%. After seasonal adjustment, home prices were up 0.4%, while the 10-City Composite increased 0.6% and 20-City Composite climbed 0.5%.
“The modest increases in home prices we saw a month ago accelerated in March 2023,” explained Craig Lazzara, managing director at S&P DJI. “The National Composite rose 1.3% in March and now stands only 3.6% below its June 2022 peak. Our 10- and 20-City Composites performed similarly, with March gains of 1.6% and 1.5%, respectively.”
The year-over-year house price index also rose modestly, up 0.7% in March. The acceleration was apparent in many Western states.
“The CoreLogic S&P Case-Shiller Index squeezed a 0.7% year-over-year increase in March. But, monthly gains, up 1.3% from February, are almost double the increase seen between the two months and suggest housing market competition heated up again in early spring, particularly in West Coast markets where most of the housing slowdown occurred in the second half of 2022,” said CoreLogic chief economist Selma Hepp. “Strongest monthly gains were in San Francisco and San Diego. In addition, higher-priced homes are once again leading the monthly gains in prices after months of relatively larger weakness following the housing slowdown.”
“One of the most interesting aspects of our report continues to lie in its stark regional differences,” Lazzara added. “Miami’s 7.7% year-over-year gain made it the best-performing city for the eighth consecutive month. Tampa (+4.8%) continued in second place, narrowly ahead of bronze medalist Charlotte (+4.7%). The farther West we look, the weaker prices are, with Seattle (-12.4%) now leading San Francisco (-11.2%) at the bottom of the league table. It’s unsurprising that the Southeast (+5.4%) remains the country’s strongest region, while the West (-6.2%) remains the weakest.”
However, Lazzara stressed that while two months of increasing prices do not make a definite recovery, March’s results suggest that the decline in home prices that began in June 2022 may have come to an end.
“The challenges posed by current mortgage rates and the continuing possibility of economic weakness are likely to remain a headwind for housing prices for at least the next several months,” he said.
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