With home values quickly appreciating, interest rates now at their highest levels in over 10 years, and record low for-sale inventory this spring, these are not the most favorable conditions for prospective buyers, to say the least.
With home values quickly appreciating, interest rates now at their highest levels in over 10 years, and record low for-sale inventory this spring, these are not the most favorable conditions for prospective buyers, to say the least.
The national Case-Shiller Home Price Index rose 19.8% year-over-year in February, up from the rate set in January. 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 17.3% in January to 18.6% in February and for the 20-city composite index from 18.9% to 20.2%. From January to February the national index (seasonally adjusted) rose 1.9%, while the 10- and 20-city indices were up 2.3% and 2.4%, respectively.
| ZILLOW FORECAST, RELEASED 3/29/22 | ACTUAL CASE-SHILLER INDICES, RELEASED 4/26/22 |
|
|---|---|---|
| 10-City Composite, Month-Over-Month (SA) |
1.7% | 2.3% |
| 10-City Composite, Year-Over-Year (NSA) |
17.6% | 18.6% |
| 20-City Composite, Month-Over-Month (SA) |
1.8% | 2.4% |
| 20-City Composite, Year-Over-Year (NSA) |
19.1% | 20.2% |
| U.S. National Month-Over-Month (SA) |
1.6% | 1.9% |
| U.S. National Year-Over-Year (NSA) |
19.2% | 19.8% |
While these challenging conditions might be expected to drain the pool of buyers, and may still do so eventually, there are signs the market remains very competitive. Listings are going pending after about a week on the market and a large share of homes are continuing to sell above their asking price. Existing home sales have trended below 2021 levels, but that appears to be more a function of low inventory than a lack of demand. There are fewer than half the number of homes on the market than at this time in 2019 – the last comparable period prior to the pandemic – yet sales continue to trend above pre-pandemic levels. Changes in inventory and affordability will remain key to the housing decisions of prospective buyers in the months ahead.
Annual home price growth as reported by Case-Shiller are expected to accelerate in the national and 10-city indices and slow slightly in the 20-city index. Monthly appreciation in March is expected to decelerate from February in both city indices, and hold in the national index. S&P Dow Jones Indices is expected to release data for the March S&P CoreLogic Case-Shiller Indices on Tuesday, May 31.
| INDEX | ACTUAL FEBRUARY CASE-SHILLER CHANGE |
ZILLOW’S FORECAST FOR THE CASE-SHILLER MARCH INDICES |
|---|---|---|
| 10-City Composite, Month-Over-Month (SA) |
2.3% | 1.9% |
| 10-City Composite, Year-Over-Year (NSA) |
18.6% | 18.7% |
| 20-City Composite, Month-Over-Month (SA) |
2.4% | 2.0% |
| 20-City Composite, Year-Over-Year (NSA) |
20.2% | 20.1% |
| U.S. National Month-Over-Month (SA) |
1.9% | 1.9% |
| U.S. National Year-Over-Year (NSA) |
19.8% | 20.2% |
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.
