- US home prices rose for the second consecutive month in March, Case-Shiller data showed.
- Prices in every city in its 20-city index rose on a month-over-month basis.
- Denver, Detroit, San Francisco, San Diego, Seattle, and Minneapolis posted the biggest MoM gains.
The housing market downturn that started last summer may now be reversing.
Home prices across the country are again trending upward, after the S&P CoreLogic Case-Shiller US National Home Price NSA Index posted its second consecutive month-over-month gain March. In the 20-city version of the index, all 20 of the cities saw home prices rise month-over-month. This follows a a 5% decline on a national basis from June 2022 to January 2023.
"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," said Craig J. Lazzara, managing director at S&P DJI, in the index's March report released on Tuesday. "That said, 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."
Data from Redfin showed home prices were up in April as well.
According to Bill Adams, the chief economist at Comerica Bank, the rise in prices in March was due to a strong economy and low housing supply as homeowners stayed put with their lower mortgage rates. But the recent rally will likely reverse later this year, he said.
"A shortage of listings, plentiful jobs, and strong wage growth are largely offsetting the headwind to housing from high mortgage rates," Adams told Insider. "I expect for national average house prices to edge slightly lower in the second half of 2023, with further declines in the most expensive West Coast markets offsetting the beginnings of a recovery in the rest of the country."
Other economists, like Credit Suisse's Ray Farris, Rosenberg Research's David Rosenberg, Pantheon Macroeconomics' Ian Shepherdson, and the American Enterprise Institute's Desmond Lachman expect home prices to fall further this year. Their reasons include high mortgage rates, historically low affordability, and a potential recession.
But some, like Zillow's Chief Economist Skylar Olsen, see prices in more of a holding pattern in the near future as supply stays low.
Interestingly enough, some of the cities that have seen the biggest declines over the last year also showed the biggest recovery from February to March.
Below, we've listed in descending order the six cities in the Case-Shiller 20-city index that posted month-over-month growth of at least 2%. Year-over-year growth figures are also included. On a year-over-year basis, Miami, Florida (7.7%), Tampa, Florida (4.8%), and Charlotte, North Carolina (4.7%), posted the largest gains.
