S&P Cotality Case-Shiller, FHFA Report House Price Gains in March

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The S&P CoreLogic Case-Shiller National Home Price Index reported that house prices reported a 0.7% annual gain in March, down from a 0.8% rise in the previous month.

“More than half of the 20 major U.S. housing markets recorded year-over-year price declines in March, reflecting a broadening and deepening housing slowdown,” noted Nicholas Godec, head of fixed-income tradables & commodities at S&P Dow Jones Indices. “With consumer inflation accelerating to roughly 3.3% in March, U.S. home values have now fallen in real terms for the 10th consecutive month, underscoring an ongoing erosion of inflation-adjusted housing wealth.”

In a separate report, the Federal Housing Finance Agency calculated house prices increased 0.1% in March, yielding a 0.5% increase for the first quarter.

“Buyers are rejecting current price tags, but sellers refuse to offer steep discounts. The result is in a standoff,” said Thom Malone, principal economist at Cotality. “Monthly price growth in March was the slowest since 2019. Sales were also low, indicating that sellers are still waiting for the rest of the economy to catch up with the housing market. Still, the modest appreciation points away from any immediate price drops and signals that buyers might be the ones who end up giving the most ground.”

Stephen Kates, financial analyst with Bankrate, Fort Mill, S.C., said the American housing landscape is “splitting regionally,” with affordable Midwestern markets holding strong while pandemic-era hotspots cool down dramatically. “For instance, Chicago led major cities with a 6.1% annual gain, whereas Seattle home prices dropped by 2.5%, and Austin fell by 6.9%. National averages paint a picture of low but positive growth, but the reality on the ground depends entirely on location,” he said.

Kates noted that with the average 30-year fixed mortgage rate jumping back up to around 6.4% by the end of March, buyers are feeling another affordability squeeze and refusing to overpay. “Sellers can no longer expect standard bidding wars or demand wild asking prices, especially since more than half of the major metropolitan markets are now experiencing annual price drops, per the S&P CoreLogic Case-Shiller index. Success in this market requires realistic pricing from sellers and patience from buyers waiting for more inventory or a better rate environment,” he said.