Home prices in April were 3.5% higher compared with April 2018, according to the S&P CoreLogic Case-Shiller U.S. National Home Price Index. That is down from the 3.7% gain seen in March. The 10-City composite, however, began to gain again, rising 2.3% annually, up from 2.2% in the previous month. The 20-City Composite rose 2.5% year-over-year, down from 2.6% in March.
This report looks back two months and is a three-month running average of prices. Other more recent reports have shown that home price gains are rising again, thanks to lower mortgage rates and more demand. Prices tracked by Zillow have fallen month-to-month for two straight months, on a seasonally adjusted basis. These are the first monthly drops in seven years. Prices also began to gain steam annually in April, according to a different survey by CoreLogic.
Going locally on the Case Shiller report, Las Vegas, Phoenix and Tampa saw the highest annual gains among the 20 cities in April. Las Vegas prices rose 7.1%, followed by Phoenix with a 6.0% increase, and Tampa with a 5.6% increase. Nine of the 20 cities reported larger annual price increases compared with March.
“Home price gains continued in a trend of broad-based moderation,” says Philip Murphy, Managing Director and Global Head of Index Governance at S&P Dow Jones Indices. “Year-over-year price gains remain positive in most cities, though at diminishing rates of change. Seattle is a notable exception, where the YOY change has decreased from 13.1% in April 2018 to 0.0% in April 2019.”
Mortgage rates have been falling steadily this year, giving home buyers more purchasing power. Lower rates often coincide with higher prices, as buyers can bid higher and competition increases. While the potential heat in prices has not shown up yet in this report, existing home sales did rise more than expected in May, according to the National Association of Realtors, suggesting renewed demand. The median price of a home sold in May also rose to the highest level ever. Part of that may be a change in the mix of homes selling, as there are many more higher-priced homes for sale, but a very, very tight supply of low-end homes for sale.