What does the data show?
The S&P Cotality Case-Shiller Home Price Index showed national home price growth holding near a standstill through March, with the U.S. National Index rising 0.7% year over year, which is down from 0.8% in February. The 10-city composite posted a 1.4% annual gain while the 20-city composite rose 0.8%. This month’s release reflects sales closing from January through March, a period that captured the most favorable rate environment in over three years. The 30-year fixed-rate mortgage briefly dipped below 6% in late February before climbing back above 6.3% by the end of March. Even with that window of relief, the spring selling season has gotten off to a cautious start: Existing-home sales edged up 0.2% in April to 4.02 million, essentially flat from a year ago. On a more forward-looking note, pending home sales rose 1.4% in April and 3.2% year over year, a signal that contract activity is finding somewhat firmer footing even as closings remain sluggish.
Â
How did trends vary by region?
The broadening of price declines is the defining story of this release. More than half of the 20 tracked metros posted year-over-year declines in March, marking the 10th consecutive month of declines, and the list of negative markets continues to expand. Seattle (-2.5%) displaced Denver (-2.0%) as the weakest performer, with Tampa (-1.9%), Dallas (-1.7%), Phoenix (-1.6%), and Los Angeles (-1.6%) also in negative territory. Washington, DC (-0.1%), slipped further into negative territory. On the other side of that divide, Chicago (+6.1%) continued to lead, followed by New York City (+4.0%) and Cleveland (+3.0%), supported by constrained resale supply. The 8.6 percentage points separating Chicago from Seattle underscore how localized this housing cycle has become. In markets where inventory has rebuilt more quickly, new construction continues to offer an increasingly competitive alternative, with recent Realtor.com® research showing that buyers of newly built homes can save an average of $25,000 in ownership costs over the first decade compared to older existing-stock homes.
What is ahead for housing?
Looking ahead, mortgage rates have risen to 6.51% as of late May, pushed higher by renewed inflation concerns and elevated energy prices. The rate environment has shifted meaningfully from the brief sub-6% window earlier this year, introducing fresh headwinds as the spring market ramps up. At the same time, inventory is running above year-ago levels in many markets, and affordability has continued to improve subtly as incomes outpace home price gains. In supply-constrained markets, price growth is likely to hold even as the national picture continues to cool.
