Home price growth chills slightly
We could be seeing early signs of a gradual slowdown in U.S. home price growth, according to the Case-Shiller Home Price Index. The index measures home price changes across the top 20 U.S. housing markets. It’s too early to call what we’re seeing a “trend,” so we’ll continue watching the rate of price growth in the months to come to see if the shifting economic picture cools the housing market.
Home prices across these 20 markets increased by 21.2% year-over-year in April 2022, the same as the month before. On a month-over-month basis, however, home prices increased by 1.8% – a slowdown from the 2.4% monthly growth rate seen in March.
Examining the bigger picture, the average monthly growth rate for home prices over the past 20 years has been 0.3.%, so this 1.8% growth is still rapid by historical standards.
The top markets for home price growth year-over-year include Tampa, Phoenix, Miami and Dallas, with each experiencing significant price growth in excess of 30%. The Sun Belt region averaged 30.7% price growth year-over-year, while the Gateway markets climbed by 16.9% during the same period.
Sun Belt home prices are still growing rapidly on a month-over-month basis as well – 2.9% in April, compared with 2.1% in Gateway markets. The Sun Belt’s month-over-month momentum is being powered along by the markets of Miami, Dallas and Tampa. However, Sun Belt market price growth has slowed from 3.5% month-over-month in March. The whole of the top 20 markets slowed from 3.1% price growth in March to 2.3% in April.
CONTI’s analysts expect to continue seeing cooling housing prices in the months ahead, considering the growing portion of the population who are electing to put their homebuying plans on hold due to increasing unaffordability. However, demand for housing is expected to remain very high, with little supply to meet the need.
This is favorable to multifamily real estate as well as single-family rentals – not only can rentals answer the need for housing, but they do so much more affordably than single family housing market.