March readings for the S&P Case-Shiller National Home Price Index showed that month-to-month home prices rose by 0.40 percent in March. The 20-City Home Price Index, which is considered a benchmark indicator by U.S. real estate professionals, rose by 0.50 percent month-to-month in March but posted a negative reading of -1.10 percent year-over-year. Analysts said that the slim supply of homes for sale drove up prices as demand for homes exceeded available inventory.
Homeowners took a “wait and see” position as mortgage rates rose and concerns over the economy persisted. Those who refinanced their mortgages to low rates during the pandemic weren’t looking to buy new homes or refinance at current mortgage rates near seven percent. Prospective homebuyers faced affordability challenges and concerns over buying at the top of their local real estate markets.
Southeast leads the U.S. in home price growth
U.S. home price growth dominated the S&P Case-Shillere 20-City Home Price Index in March; the top three cities reporting the highest year-over-year home price appreciation rates were Miami, Florida with 7.7 percent growth. Tampa, Florida reported 4.8 percent home price growth and Charlotte, North Carolina held third place with 4.7 percent year-over-year home price growth.
The Western region continued to lag as year-over-year home prices fell by -1.10 percent from March 2022 to March 2023 as compared with 0.40 percent year-over-year growth in February. Data included in S&P Case-Shiller readings are seasonally adjusted. All 20 cities reported home price gains on a month-to-month basis, which indicates that housing prices continue to recover from the lows that occurred during the pandemic. Home prices will indicate further developments in the economic recovery based on how home prices and sales perform during the typically busy summer home-buying season.
FHFA reports 3.6 percent year-over-year home price growth in March
The Federal Housing Finance Agency, which oversees government-sponsored mortgage enterprises Fannie Mae and Freddie Mac, reported 3.6 percent seasonally-adjusted year-over-year growth in home prices for U.S. properties owned and sold by the two government-sponsored organizations. FHFA reported regional home price growth rates for the nine U.S. Census divisions; month-to-month results ranged from -10 percent in the Pacific division to 1.20 percent growth in the Mountain division.
Last week’s economic news included readings on new and pending home sales and inflation. The final monthly reading for May consumer sentiment was released along with weekly readings on mortgage rates and jobless claims.