Home prices rose for the third consecutive month in April, further adding further challenges to potential buyers in an already tight market after a brief reprieve, according to data released Tuesday.
Nationwide home prices increased by 1.3 percent month-on-month before seasonal adjustment, the S&P CoreLogic Case-Shiller Index showed.
Home prices fell by 0.2 percent year-over-year in April, marking the first annual decline since 2012, according to CNN. But experts expect prices to keep rising this year as the Fed eases up on interest rate hikes.
“The U.S. housing market continued to strengthen in April 2023,” says Craig J. Lazzara, managing director at S&P DJI.
“If I were trying to make a case that the decline in home prices that began in June 2022 had definitively ended in January 2023, April’s data would bolster my argument.
Miami, Chicago, and Atlanta reported the highest year-over-year gains among the top 20 cities in April. Miami led the way with a 5.2 percent increase.
While months of price gains are boosting values for homeowners lost in the past year, rising prices are keeping the pressure on buyers.
“For housing markets in the first half of 2023, a rebound in demand ran headlong into a market still struggling with undersupply,” said George Ratiu, chief economist at Keeping Current Matters, in a statement.
“The ongoing dynamic has been adding upward pressure on prices, especially in affordable markets. The big surprise for buyers in select markets this year has been the return of multiple bids on well-priced properties,” he added.
But prices will hinge largely on the economic outlook in the coming months and whether mortgage rates remain elevated, S&P’s Lazzara noted. The average 30-year fixed rate mortgage declined again last but stayed high at 6.67 percent.
Lazzara said it “will depend on how well the market navigates the challenges posed by current mortgage rates and the continuing possibility of economic weakness.”