Home Price Appreciation Finally Dips After Months Of Acceleration

Annual home price appreciation dipped slightly in April, the first decline in months and a sign that the housing market is finally pumping the brakes.

The S&P CoreLogic Case-Shiller Index, which measures average home prices, found that home prices rose by 20.4% YOY, decelerating from March’s read of 20.6%.

Though it’s not a drastic fall, the numbers suggest that rising mortgage rates and increasing costs associated with buying a home are deterring buyers.

The last time prices decelerated was in November of 2021.

“April 2022 showed initial (although inconsistent) signs of a deceleration in the growth rate of U.S. home prices,” said Craig Lazzara, managing director at S&P DJI.

“We continue to observe very broad strength in the housing market, as all 20 cities notched double-digit price increases for the 12 months ended in April. April’s price increase ranked in the top quintile of historical experience for every city, and in the top decile for 19 of them.”

Only nine metros experienced month-over-month home price growth in April, down from 20 metros in March.

At the same time, the Federal Housing Finance Agency’s House Price Index shows house prices rose 1.6% month-over-month in April and 18.8% YOY.

“House price appreciation continues to remain elevated in April,” said Will Doerner, Ph.D., Supervisory Economist in FHFA’s Division of Research and Statistics.

“The inventory of homes on the market remains low, which has continued to keep upward pressure on sales prices.  Increasing mortgage rates have yet to offset demand enough to deter the strong price gains happening across the country.”

Though it’s been slow going, home prices are expected to come down as more buyers are priced out of the market

At current rates, the monthly mortgage payment on a median single-family home with a 10% downpayment is up by $800 just since the beginning of 2022. Interest rates are up two full percentage points just since the first of the year, averaging 5.81% last week.