It’s hard not to notice the winds beginning to shift in the housing market. But those changes have yet to reach the point where they’ve fully transitioned from home buyer headwinds into tailwinds, and likely won’t until at least the end of the decade.
It’s hard not to notice the winds beginning to shift in the housing market. But those changes have yet to reach the point where they’ve fully transitioned from home buyer headwinds into tailwinds, and likely won’t until at least the end of the decade.
Still, the signs of change are here: The U.S. National Case-Shiller Home Price Index® climbed 6.2 percent in June from a year earlier, slightly slower than the 6.4 percent annual growth recorded in May. June prices rose 0.3 percent from May – slightly below expectations.
And annual home price appreciation was slower in June than in May in 14 of the 20 cities in Case-Shiller’s 20-City Composite Index. Las Vegas, Seattle and San Francisco continued to report the highest year-over-year gains at 13 percent, 12.8 percent and 10.7 percent, respectively.
But the slowdown, and the changes it brings, will be gradual. Inventory, when it begins to rise, will be coming up from incredibly low levels. Home value growth remains well above historic norms, even as it slows in some markets – and that rapid growth still makes saving an adequate down payment a challenge for many buyers. And while sellers are seemingly more open to cutting their initial asking price than in recent months, that trend is more prominent at the upper end of the market where there is more selection.
Buyers at the lower end of the market, including many first-time buyers and buyers of limited means, will still face intense competition and a fast-moving, difficult environment. The truth is, we aren’t witnessing a rapid shift in market power, but rather a slowly unfolding evolution in which things are changing from extremely competitive for buyers to only somewhat competitive.
Sellers, for now and for the foreseeable future, are still in control in this market.
Zillow’s expects Case-Shiller data for July, to be released September 25, to show national home-price appreciation of 6.1 percent year-over-year.
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.
