Earlier this spring, with inventory just beginning to sprout up from its historic low, demand for homes began to slip amid rising prices and mortgage rates, slightly edging April home price growth down from the previous record to 20.4%.
Earlier this spring, with inventory just beginning to sprout up from its historic low, demand for homes began to slip amid rising prices and mortgage rates, slightly edging April home price growth down from the previous record to 20.4%.
The national Case-Shiller Home Price Index rose 20.4% year-over-year in April, holding steady from the rate set in March. Annual appreciation also accelerated in both the 10- and 20-city (non-seasonally adjusted) indices. The annual gain in the 10-city index rose from 19.5% in March to 19.7% in April and for the 20-city composite index from 21.1% to 21.2%. From March to April the national index (seasonally adjusted) rose 1.5%, while the 10- and 20-city indices were up 1.8% and 1.8%, respectively.
| ZILLOW FORECAST, RELEASED 6/1/22 | ACTUAL CASE-SHILLER INDICES, RELEASED 6/28/22 |
|
|---|---|---|
| 10-City Composite, Month-Over-Month (SA) |
1.8% | 1.8% |
| 10-City Composite, Year-Over-Year (NSA) |
19.1% | 19.7% |
| 20-City Composite, Month-Over-Month (SA) |
2.0% | 1.8% |
| 20-City Composite, Year-Over-Year (NSA) |
20.8% | 21.2% |
| U.S. National Month-Over-Month (SA) |
2.1% | 1.5% |
| U.S. National Year-Over-Year (NSA) |
20.8% | 20.4% |
With rates continuing their steep ascent and inventory picking up in months since, April is likely the first month of this deceleration as buyers balked at the cost of purchasing a home and pulled out of the market, leading to slower price growth. While inventory is improving, there is still plenty of room to go before it reaches its pre-pandemic trend. Still, coupled with relatively strong demand, that will continue to be a driver for sustained high prices even as sales volume is dropping in response to affordability constraints. As a result, more buyers will take a step to the sidelines in the coming months, which will help inventory to recover and price growth to slow from its peak, leading the market back to a more balanced stable state in the long run and providing more future opportunities for homeownership for those priced out today.
Annual home price growth as reported by Case-Shiller are expected to slow in all three indices. Monthly appreciation in May is expected to decelerate from April in both city indices, and hold in the national index. S&P Dow Jones Indices is expected to release data for the May S&P CoreLogic Case-Shiller Indices on Tuesday, July 26.
| INDEX | ACTUAL April CASE-SHILLER CHANGE |
ZILLOW’S FORECAST FOR THE CASE-SHILLER May INDICES |
|---|---|---|
| 10-City Composite, Month-Over-Month (SA) |
1.8% | 1.6% |
| 10-City Composite, Year-Over-Year (NSA) |
19.7% | 18.9% |
| 20-City Composite, Month-Over-Month (SA) |
1.8% | 1.7% |
| 20-City Composite, Year-Over-Year (NSA) |
21.2% | 20.3% |
| U.S. National Month-Over-Month (SA) |
1.5% | 1.5% |
| U.S. National Year-Over-Year (NSA) |
20.4% | 19.5% |
Note: Case-Shiller and Case-Shiller Index are registered trademarks of CoreLogic Solutions, LLC. The statements herein are not endorsed by or provided in association or connection with CoreLogic, LLC.
