Data released today shows a modest increase in home prices took place in March, signaling that home price declines may be over.
Year-over-year, prices increased by 0.7%, down from 2.1% in the prior month, according to the S&P CoreLogic Case-Shiller National Home Price NSA Index.
The 20-City Composite posted a -1.1% year-over-year decline, down from a 0.4% gain in the previous month.
“The modest increases in home prices we saw a month ago accelerated in March 2023,” Craig J. Lazzara, managing director at S&P DJI, said. “Two months of increasing prices do not a definitive recovery make, but March’s results suggest that the decline in home prices that began in June 2022 may have come to an end.”
Lazzara added that “the farther west we look, the weaker prices are,” with West Coast hubs that saw huge migration during the pandemic remaining negative YOY.
Southeastern cities continued to see gains, with Miami (+7.7%) and Tampa (+4.8%) topping the list.
But prices likely won’t execute a complete turnaround any time soon.
“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,” Lazzara said.
Mortgage rates are inching up again after falling for a few weeks. Mixed inflation news, political turmoil surrounding the debt ceiling, and fallout from the Silicon Valley Bank failure have investors nervous, impacting Treasury yields. Daily average rates exceeded 7% on May 25, hitting their highest level since November.
At the current rate, 6.57%, the typical buyer’s monthly mortgage payment amounts to $2,614, a record high.
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