Home prices appear to have bucked their downward trend, rising almost everywhere in the U.S. in March.
Black Knight’s latest Mortgage Monitor report found that home prices rose last month on both non-adjusted (+1.38%) and seasonally adjusted (+0.45%) bases.
This is the third consecutive month of increases recorded by Black Knight, with 92% of markets seeing prices increase.
“[J]ust five months ago, prices were declining on a seasonally adjusted month-over-month basis in 92% of all major U.S. markets. Fast forward to March, and the situation has done a literal 180,” said Black Knight Vice President of Enterprise Research Andy Walden.
Other than Western and pandemic boomtown markets, 40% have seen prices return to peak levels, with only Austin (-0.7%), Salt Lake City (-0.12%), and San Antonio (-0.07%) still seeing prices falling on an adjusted basis.
Black Knight attributes the boost to a small increase in buyer demand coupled with continuing stock shortages. Seasonally adjusted sales volumes rose 13% from January’s low point. They remain an additional 13% below their pre-pandemic average, however.
Meanwhile, active for-sale listings declined for a sixth consecutive month to their lowest level since April 2022. New listings were down 30% from their pre-pandemic average, adding to home shopper’s troubles.
Year-over-year, prices are cooling as many buyers are booted from the market by high interest rates. Appreciation increased by a mere 1% from March 2020, with growth falling by 1.3-1.4% each month since the start of 2023.
“That said, low inventory levels will limit just how far that metric will fall in coming months,” Walden noted of YOY growth.
Though some analysts are optimistic that the market will even out sooner rather than later, others expect inventory constraints will keep many buyers sidelined for months to come.
“If current economic conditions persist, with elevated mortgage rates and home prices amid scarce inventory, the market is likely in for a long, slow climb and a few bumps along the way,” Danielle Hale, chief economist at Realtor.com, told Forbes.
Jack Macdowell, CIO and co-founder at Palisades Group, added that the group doesn’t expect inventory to recover until at least 2024.