In Recurring Trend, Home Prices Slow

Appreciation in April fell for the 13th month in a row, with prices rising 3.5 percent year-over-year, downshifting from 3.7 percent the prior month and 6.4 percent the prior year, according to the latest national S&P CoreLogic/Case-Shiller Indices.

According to Philip Murphy, managing director and global head of Index Governance at S&P Dow Jones Indices, “broad-based moderation” is the pattern, despite the movement of rates, which had impacted prices in 2018.

“The national average 30-year fixed mortgage rate rose from below 4 percent in late 2017 to briefly reaching almost 5 percent by the latter part of 2018,” explains Murphy. “Peak year-over-year changes in the 20-City Composite coincided with the upward turn in mortgage rates during the first quarter of 2018. In 2019, mortgage rates reversed course again and the 30-year fixed mortgage rate is again under 4 percent, yet the year-over-year house price moderation that coincided with the 2018 uptick in rates has not changed course.”

The average 30-year fixed mortgage rate stands at 3.84 percent, Freddie Mac reports.

“Perhaps the trend for the moment is toward normalization around the real long run average annual price increase,” Murphy says. “Comparing the year-over-year National Index nominal change of 3.5 percent to April’s inflation rate of 2 percent yields a real house price change of 1.5 percent—edging closer to the real long run of average of 1.2 percent.”

However, CoreLogic Deputy Chief Economist Ralph McLaughlin foresees a shift.

“The U.S. housing market is showing signs the cooldown may end within the next few months,” McLaughlin says. “While the slowdown is now in its 13th consecutive month, half of the country’s markets are now seeing an increase in home price appreciation from March to April. This suggests the great cooldown of 2018-2019 might be coming to an end. Coupled with mortgage rates falling to 18-month lows, it seems the housing market frost is poised to thaw quickly this summer.”

The complete data for the 20 markets measured by S&P:

Atlanta, Ga.
MoM: 1%
YoY: 4.9%

Boston, Mass.
MoM: 1.9%
YoY: 3.9%

Charlotte, N.C.
MoM: 1%
YoY: 4.2%

Chicago, Ill.
MoM: 1.2%
YoY: 1.9%

Cleveland, Ohio
MoM: 0.7%
YoY: 3.5%

Dallas, Texas
MoM: 0.6%
YoY: 2.7%

Denver, Colo.
MoM: 0.8%
YoY: 3.8%

Detroit, Mich.
MoM: 1.6%
YoY: 3.5%

Las Vegas, Nev.
MoM: 0.6%
YoY: 7.1%

Los Angeles, Calif.
MoM: 1%
YoY: 1.5%

Miami, Fla.
MoM: 0.1%
YoY: 3.9%