The numbers: U.S. home prices rose in April as the housing market continues to contend with a scarcity of for-sale listings.
Homeowners’ unwillingness to sell is pushing up home prices, despite elevated mortgage rates. The S&P CoreLogic Case-Shiller 20-city house-price index rose 0.9% in April, as compared with the previous month.
Home prices were strongest in the southeastern U.S., while much of the rest of the country saw price declines.
Though mortgage rates are hovering around 7%, rates have not dampened buyer demand, as home shoppers have largely adjusted to the higher rates.
The year-over-year change in home prices in April was down 1.7%, accelerating from a dip last month of 1.1%.
A broader measure of home prices, the national index, saw a month-over-month rose in April of 0.5%, but that metric was down 0.2% over the past year.
All numbers are seasonally adjusted.
Key details: The Southeast is no longer the only place where home-price growth is occurring, with Chicago joining the ranks of the top three cities with the highest year-over-year gains among the 20 cities in April. Tampa took the top spot, while Atlanta ranked third.
The West Coast continued to lag the rest of the country: Home prices fell most in Seattle and San Francisco.
| Cities | Change from last year |
| Atlanta | 3.5% |
| Boston | 0.9% |
| Charlotte | 3.4% |
| Chicago | 4.1% |
| Cleveland | 2.9% |
| Dallas | -2.9% |
| Denver | -4.5% |
| Detroit | 1.1% |
| Las Vegas | -6.6% |
| Los Angeles | -3.2% |
| Miami | 5.2% |
| Minneapolis | 0.0% |
| New York | 3.0% |
| Phoenix | -6.1% |
| Portland | -5.2% |
| San Diego | -5.6% |
| San Francisco | -11.1% |
| Seattle | -12.4% |
| Tampa | 2.4% |
| Washington | -0.5% |
| Composite-20 | -1.7% |
A separate report from the Federal Housing Finance Agency also showed home prices rising in April, up 0.7% from March. Home prices were the strongest in New England, according to the government’s data.
And over the last year the FHFA index was up 3.1%.
Big picture: Housing is facing a crisis of demand and supply, but it’s broadly recovered as buyers are adjusting to the new normal of high rates.
There’s a shortage of homes for sale and too much demand from aspiring homeowners. Homeowners feel no compulsion to sell. There’s little incentive for homeowners to give up their ultralow mortgage rate for a new home loan that’s in the 7% range.
New-home sales have been a bright spot for home shoppers as homebuilders add inventory, bringing some options to the market.
What S&P said: “The ongoing recovery in home prices is broadly based,” Craig J. Lazzara, managing director at S&P DJI, said.
Home prices in 19 out of the 20 major cities rose in April, he noted, when looking at seasonally adjusted data.
Looking at the list of the top-performing cities, there is “remarkable diversity,” Lazzara added. New York and Cleveland inched up to spots No. 5 and 6.
What are they saying? “It looks like the brief slide in home prices is over,” Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets, wrote in a note.
“Aside from offering more support for the view that housing may be bottoming,” he added, “this also means that the degree to which shelter costs are likely to provide relief on the core inflation front may be limited.”
Market reaction: Stocks
DJIA,
SPX,
were moderately higher on Tuesday, with the tech-dominated Nasdaq
COMP,
leading the way. The yield on the 10-year Treasury note
TMUBMUSD30Y,
rose above 3.7%.
Read the full article here