Home prices continue to rise, but not as rapidly as before. (iStock)
Home prices rose again in April, hitting new highs that are likely to keep homebuyers holding off even as mortgage rates start to ease, according to the latest S&P CoreLogic Case-Shiller National Home Price Index. report.
Home prices rose 6.3% year-over-year in April, slowing slightly from March’s 6.5% year-over-year increase. The 10-city index and 20-city index rose 8% and 7.2%, respectively, down 0.3 percentage points from the previous month’s year-over-year increases. Prices remain strong, but at the same time, they are showing signs of decline.
“At a 6.3% annualized gain, the index has slowed since the start of the year and is one of only two markets to have risen on an annualized basis,” said Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices.
Nationwide, home prices rose 0.3% from the previous month, unchanged from the previous month. The 10-city composite recorded an increase of 0.5% and the 20-city composite rose 0.4% on a seasonally adjusted basis.
“The S&P CoreLogic Case-Shiller Home Price Index remains strong due to a lack of homes for sale,” said Max Slyusarchuk, founder and CEO of A&D Mortgage. “However, while homebuilder confidence is strong enough to continue building homes, we are hearing in some markets that homebuilders still need to offer concessions such as point buydowns to secure many home purchases.”
Homebuyers can find the best mortgage rate by weighing their options. They can visit online marketplaces like Credible to compare rates, choose loan terms and get pre-approved with multiple lenders at once.
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These cities saw the biggest increases in home prices
Regionally, San Diego was once again the fastest growing market, with prices increasing 10.3% year over year. New York and Chicago came in second and third, posting annual growth of 9.4% and 8.7%, respectively.
Markets where home price growth slowed were concentrated in the West, with Portland, Denver and Minneapolis seeing the slowest increases of 1.7%, 2% and 2.9%, respectively.
“The Northeast market last saw sustained strong performance in 2011,” Luke says, “and for the next 10 years the West and South dominated the top performing regions. It’s been over a year since either the South or West were the top performing region.”
One way to increase the equity in your home is to take out a HELOC or cash-out refinance. These funds can be used to pay off high-interest debt or fund home improvement projects. To find personalized interest rates that won’t affect your credit score, visit Credible.
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Housing supply remains a problem
In addition to high home prices and high borrowing costs, borrowers are also struggling with a housing shortage, which is why home prices have remained strong.
From February to April, new listings increased 11.3% and 15.5%, respectively, from a year ago, helping to increase active inventory in the housing market from 14.8% to 30.4% during that period, according to Daniel Hale, chief economist at Realtor.com. However, Hale said housing inventory in April remained about 36% lower than pre-pandemic levels.
U.S. housing demand is down by 4.5 million homes in 2022, down from 4.3 million in 2021, driven by a surge in population growth outpacing housing supply, a recent Zillow study found. report.
New home construction has increased in recent years, but more housing inventory is needed to meet demand and address the protracted housing shortage that has hindered homebuying for more than a decade. In 2022, more than 8 million groups and individuals tried to create a household. But the report said that in that year, only 3.5 million homes were available for rent or sale. An additional 1.45 million homes were added to inventory in 2023.
“The simple fact is that there isn’t enough housing in this country, which makes homeownership out of reach for many families,” said Orphée Divongay, senior economist at Zillow.
If you’re considering buying a home, comparison shopping can help you find the best mortgage rates. To compare options without affecting your credit score, visit Credible.
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