Home prices increased again in April, hitting a new high that will likely keep homebuyers sidelined even as mortgage rates begin to soften, according to the latest S&P CoreLogic Case-Shiller national home price index report.
Home prices rose 6.3% annually in April, a slight slowdown from the 6.5% annual increase in March. The 10- and 20-city indexes rose by 8% and 7.2% annually, respectively, each 0.3 percentage points slower than the prior month’s annual pace. While prices continue to show resilience, they also show signs of cooling.
“At 6.3% annual gains, the index has decelerated from the start of the year, with only two markets rising on an annual basis,” said Brian Luke, S&P Dow Jones Indices head of commodities, real & digital assets.
Across the nation, home prices increased 0.3% month-over-month, the same growth as in the previous month. The 10-city composite registered 0.5% growth, while the 20-city composite increased by 0.4% after seasonal adjustment.
“The S&P CoreLogic Case Shiller Home Price Index continues to remain strong due to a scarcity of homes for sale,” A&D Mortgage Founder and CEO Max Slyusarchuk said. “However, homebuilder confidence is strong enough to continue building homes, but we hear in some markets that homebuilders still need to offer concessions, such as points buydowns, to secure many home purchases.”
Homebuyers can find the best mortgage rate by shopping around and comparing options. You can visit an online marketplace like Credible to compare rates, choose your loan term and get preapproved with multiple lenders at once.
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Prices for homes in these cities gained the most
Regionally, San Diego was again the fastest-growing market, with prices up 10.3% from a year ago. New York and Chicago followed in second and third place, registering annual growth of 9.4% and 8.7%, respectively.
Markets seeing slower home price growth were focused in the West, with Portland, Denver and Minneapolis registering the most modest gains at 1.7%, 2%, and 2.9%, respectively.
“Sustained outperformance of the Northeast market was last observed in 2011,” Luke said. “For the decade that followed, the West and the South held the top posts for performance. It’s now been over a year since we’ve seen the top region come from the South or the West.”
One way to use your home’s growing equity is through a HELOC or a cash-out refinance. These funds can be used to help pay down high-interest debt or fund home improvement projects. Visit Credible to find your personalized interest rate without affecting your credit score.
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Housing supply is still an issue
Beyond high home prices and expensive borrowing costs, borrowers struggle with a lack of housing supply. It is also a reason why home prices have remained strong.
Newly listed homes rose 11.3% and 15.5% above the prior year’s pace between February and April, contributing to the 14.8% to 30.4% growth in active inventory in the housing market during this period, according to Realtor.com Chief Economist Danielle Hale. However, Hale said that April home inventory remained nearly 36% lower than pre-pandemic levels.
The U.S. had 4.5 million fewer homes than it needed in 2022, up from 4.3 million in 2021. This was driven by a surge in population growth that has outpaced housing supply, according to a recent Zillow report.
New builds have picked up in recent years, but more housing inventory is needed to keep up with demand and address the lingering deficit that has hampered housing affordability for over a decade. In 2022, more than 8 million groups or individuals sought to form their households. Yet the report said only 3.5 million homes were available for rent or sale that year. Another 1.45 million were added to the inventory in 2023.
“The simple fact is there are not enough homes in this country, and that’s pushing homeownership out of reach for too many families,” Zillow Senior Economist Orphe Divounguy said.
If you’re looking to become a homeowner, you could still find the best mortgage rates by shopping around. Visit Credible to compare your options without affecting your credit score.
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