Home prices rebound in April to kick off solid start to spring homebuying season: Case-Shiller
Home prices may have reached a bottom, economists say
A rebound in home prices could signal that buyers are becoming used to the idea that mortgage rates in the 6% to 7% range are here to stay, according to the latest Case-Shiller report. (iStock)
The spring housing market regained some footing as home prices showed another month of strong price increases, according to the latest S&P CoreLogic Case-Shiller Indices report.
Although home prices across the U.S. fell by 0.2% annually in April, on a monthly basis, prices increased by 1.3%, according to CoreLogic's S&P Case-Shiller index.
Moreover, prices also increased among high-tier homes, despite buyers' affordability challenges in a higher mortgage rate environment.
"Today's S&P CoreLogic Case-Shiller Index highlighted a spring housing market regaining its footing after a winter of dire forecasts," Keeping Current Matters Chief Economist George Ratiu said. "While headlines of six months ago called for a sustained buyer pullback, accompanied by significant price declines due to the sharp rise in interest rates, the spring market saw demand rebound."
If you want to take advantage of interest rates before they potentially go up, you could consider shopping for the right mortgage or refinance your existing one. Visit Credible to speak with a mortgage expert and get your questions answered.
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Home prices have reached their bottom
The 10-city and 20-city composites saw monthly gains of 1.7%, with homes in Miami, Chicago and Atlanta posting the largest price gains.
"Also, some markets that were weak during the pandemic are now showing strong price gains across price tiers, particularly Boston," CoreLogic Chief Economist Selma Hepp said in a statement.
On a monthly basis, home prices have increased an average of 1%, so the recent gains suggest that home prices have reached their bottom and are in an upward trend again, according to Hepp. CoreLogic's latest Home Price Index projects that home prices nationally will average a 4% increase in 2023 compared with the previous year
"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," Craig Lazzara, S&P Dow Jones Indices managing director, said. "Whether we see further support for that view in coming months will depend on how well the market navigates the challenges posed by current mortgage rates and the continuing possibility of economic weakness."
If you are looking to reduce your expenses, you could consider refinancing your home loan to lower your monthly payment. Visit Credible to compare multiple mortgage lenders at once and choose the one with the best interest rate for you.
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Lack of housing supply boosts prices
Despite the improvement, affordability issues defined by high mortgage rates continue to impact housing market dynamics and limit price growth, said Hepp.
However, concerns that prices could dip significantly have ebbed since a lack of housing supply has helped to keep the market stable. Housing supply in the first quarter averaged 1.63 million listings, a 40% reduction from the first quarter of 2019, according to the National Association of Realtors (NAR).
"While elevated mortgage rates have dampened home price growth and even led to declines in some areas, a lack of inventory continues to keep a floor under prices, Hepp said. "The remainder of the year is likely to continue to reflect these trends, suggesting that 2023 home buying activity may be the slowest in about a decade, though price growth may return to long-term trends in most markets across the country.
"In addition, the accumulation of home equity, which averages over $270,000 nationally and more than $1 million in some high-cost areas, supports price appreciation, particularly in in-migrating markets where baby boomers may retire," continued Hepp.
Homebuyers may find a better mortgage rate by shopping several lenders. If you are ready to shop for a mortgage loan, visit Credible to help you compare interest rates from multiple mortgage lenders and choose the one with the best rate for you.
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