National home value growth was nearly stagnant in April, as moderate increases in the Midwest and Northeast offset declines in many Sun Belt and Western metropolitan areas. This trend reflects a continuing fragmentation within the U.S. housing market.
According to data from the S&P CoreLogic Case-Shiller Index, the value of single-family homes, as measured by repeat transactions, rose 0.8% in April compared to a year earlier. This marks a slight acceleration from the 0.7% increase observed in the previous month.
"With inflation accelerating to 3.8% in April, home values have now declined in real terms for an 11th straight month, further eroding inflation-adjusted housing wealth," said Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones Indices. "The affordability pinch remains a key headwind." Godec noted that 30-year mortgage rates climbed back to 6.3% in April after dipping below 6% earlier in the year, keeping financing costs elevated. "In this higher-rate environment, home price growth remains constrained, with housing largely treading water in nominal terms and falling in real terms."
At the metropolitan level, Chicago continued to show the strongest performance among the 20 cities tracked by the index, with a 6.5% annual gain. New York followed with a 3.8% increase, and Cleveland saw a 3.2% rise.
Conversely, home values were falling faster in Seattle than in any other major market for the second consecutive month, experiencing a 2.3% annual decline. Other markets with falling home values included Denver (-1.8%), Tampa, Florida (-1.8%), Dallas (-1.6%), and Phoenix (-1.7%).
Despite persistent affordability challenges, signs suggest that buyers and sellers are finding more common ground. Existing-home sales rose 3.2% in May to a five-month high of 4.17 million, and pending home sales climbed 3.8%, showing a 4.8% year-over-year gain, according to Realtor.com senior economist Anthony Smith. "These are signs that buyers and sellers are finding more common ground even as affordability challenges persist," Smith stated.
Regional price trends indicate a slight narrowing of declining metros from March, though more than half of the 20 tracked markets continued to post annual declines. "The nearly 9-percentage-point gap separating Chicago from Seattle underscores how localized this housing cycle has become," Smith observed. He added that in markets where inventory has rebuilt more quickly, new construction offers a competitive alternative, potentially saving buyers of newly built homes an average of $25,000 in ownership costs over the first decade compared to older existing stock.
With mortgage rates hovering near 6.5% for six consecutive weeks, influenced by renewed inflation concerns and elevated energy prices, Smith anticipates price growth to hold steady in supply-constrained markets, even as the national trend cools.
The Case-Shiller Index reports on a two-month delay and reflects a three-month moving average of home sales prices. The index is considered a strong measure of changing home values due to its reliance on repeat transactions of the same properties. The data released in March primarily reflects purchase decisions made during the winter months, with homes typically going under contract one to two months before closing.