Demand for homes has stubbornly kept ahead of supply this spring, even in the face of rapidly rising costs. This imbalance between supply and demand for homes this spring has been the key driver in home price growth that continues to set records month after month.
The national Case-Shiller Home Price Index rose 20.6% year-over-year in March, up from the rate set in February. 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 18.7% in February to 19.5% in March and for the 20-city composite index from 20.3% to 21.2%. From February to March 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 4/26/22 | ACTUAL CASE-SHILLER INDICES, RELEASED 5/31/22 |
|
|---|---|---|
| 10-City Composite, Month-Over-Month (SA) |
1.9% | 2.2% |
| 10-City Composite, Year-Over-Year (NSA) |
18.7% | 19.5% |
| 20-City Composite, Month-Over-Month (SA) |
2.0% | 2.4% |
| 20-City Composite, Year-Over-Year (NSA) |
20.1% | 21.2% |
| U.S. National Month-Over-Month (SA) |
1.9% | 2.1% |
| U.S. National Year-Over-Year (NSA) |
20.2% | 20.6% |
Inventory is starting to make its way out from the depths, but remains not far off all time lows from the winter. All the while, demand for home purchases has held strong despite interest rates reaching levels not seen in more than a decade alongside record-breaking appreciation. Homes that are going pending are doing so at the quickest pace on record and the share of homes selling above their asking price is at a record for the spring season. However, the market may be nearing an inflection point when it comes to price growth. Mortgage costs are more than 50% higher than they were a year ago and prospective buyers will likely start to rethink what they can afford. Sellers may already be responding, with the rate of price cuts now on the rise, to meet buyers where they are. Price growth will likely begin to come back towards earth as many buyers are priced out and inventory rises.
Annual home price growth as reported by Case-Shiller are expected to accelerate in the national index and slow slightly in the 10-city and the 20-city indices. Monthly appreciation in April is expected to decelerate from March in both city indices, and hold in the national index. S&P Dow Jones Indices is expected to release data for the April S&P CoreLogic Case-Shiller Indices on Tuesday, June 28.
| INDEX | ACTUAL March CASE-SHILLER CHANGE |
ZILLOW’S FORECAST FOR THE CASE-SHILLER April INDICES |
|---|---|---|
| 10-City Composite, Month-Over-Month (SA) |
2.2% | 1.8% |
| 10-City Composite, Year-Over-Year (NSA) |
19.5% | 19.1% |
| 20-City Composite, Month-Over-Month (SA) |
2.4% | 2.0% |
| 20-City Composite, Year-Over-Year (NSA) |
21.2% | 20.8% |
| U.S. National Month-Over-Month (SA) |
2.1% | 2.1% |
| U.S. National Year-Over-Year (NSA) |
20.6% | 20.8% |
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.