- Annual house price growth decelerated in March to 0.7%, the slowest pace in over 10 years.
- House prices rose on the month in 15 out of the 20 cities tracked by the 20-City index
- Affordability should improve with lower mortgage rates and falling prices.
House prices rose modestly in March from February after declining for eight straight months, according to the S&P CoreLogic Case-Shiller National Composite Index. The index rose 0.5% (after seasonally adjustments) in March from February following a 0.1% decline (revised from 0.1% growth) in February. Annual house price appreciation decelerated to 0.7% in March, the slowest pace since May 2012, and down from 2.1% in February. Annual price appreciation has now decelerated for twelve straight months. With the increase in March, house prices are now 3.6% below the June 2022 peak. The S&P CoreLogic Case-Shiller indices are repeat sales indices calculated using three-month moving averages.
The S&P CoreLogic Case-Shiller 20-City Index fell 1.2% in March versus March 2022, after increasing 0.4% in February. Miami (7.7%), Tampa (4.9%), and Charlotte (4.7%) reported the highest year-over-year price increases while San Diego (-5.4%), San Francisco (-11.2%) and Seattle (-12.4%) experienced the sharpest yearly declines. Prices rose from the prior month in all cities tracked by the index except Dallas (-0.1%), Cleveland (-0.2%), Las Vegas (-0.4%), Phoenix (-0.4%), and Seattle (-0.9%).
The housing market correction has been more evident in the West where house prices skyrocketed in recent years. Miami recorded the strongest year-over-year gain in February for the eight straight month. Looking ahead, the housing market correction will likely continue through 2023 and into 2024 as the Fed keeps the fed funds rate elevated and the U.S. economy slows. Affordability should improve with lower mortgage rates and falling prices. An increase in new construction should improve total inventory levels but the longstanding demand-supply imbalance in the housing market will likely continue to persist for some time.
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