The latest S&P Down Jones Indices (S&P DJI) CoreLogic Case-Shiller Indices revealed for February a modest increase in the components of the reports even though eight of the 20 major metropolitan areas saw a decrease in prices.
On a yearly basis the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 2.0% annual gain in February, down from 3.7% in the previous month. The top-10 city composite annual increase came in at a meager 0.4%, down from 2.5% in the previous month. The top-20 city composite also posted a 0.4% year-over-year gain, down from 2.6% in January 2023.
Miami, Tampa, and Atlanta again reported the highest year-over-year gains among the 20 cities in February. The order remained the same with Miami leading the way with a 10.8% year-over-year price increase, followed by Tampa in second with a 7.7% increase, and Atlanta in third with a 6.6% increase. All 20 cities reported lower prices in the year ending February 2023 versus the year ending January 2023.”
On a monthly basis in February 2023, the National Index posted a 0.2% month-over-month increase in February, while the 10-City and 20-City Composites posted increases of 0.3% and 0.2%, respectively. After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 0.2%, while both the 10-City and 20-City Composites posted increases of 0.1%.”
“Home price trends moderated in February 2023,” said Craig J. Lazzara, Managing Director at S&P DJI. “The National Composite, which had declined for seven consecutive months, rose a modest 0.2% in February, and now stands 4.9% below its June 2022 peak. Our 10- and 20-City Composites performed similarly, with February gains of 0.3% and 0.2%; these Composites are currently 6.0% and 6.6% below their respective peaks. On a trailing 12-month basis, the National Composite is only 2.0% above its level in February 2022; the 10- and 20-City Composites are both up 0.4% on a year-over-year basis.”
“The moderation we observed nationally is also apparent at a more granular level. Before seasonal adjustment, prices rose in 12 cities in February (versus in only one in January). Seasonally adjusted data showed nine cities with rising prices in February (versus five in January). With or without seasonal adjustment, most cities’ February results showed improvement relative to their January counterparts.”
“February’s results were most interesting because of their stark regional differences. Miami’s 10.8% year-over-year gain made it the best-performing city for the seventh consecutive month. Tampa (+7.7%) and Atlanta (+6.6%) continued in second and third place, with Charlotte (+6.0%) close behind. Results were different in the Pacific and Mountain time zones. Last month, four West Coast cities (San Francisco, Seattle, San Diego, and Portland) were in negative year-over-year territory. In February they were joined by four of their western neighbors, as Las Vegas (-2.6%), Phoenix (-2.1%), Los Angeles (-1.3%), and Denver (-1.2%) all tipped into negative territory. It’s unsurprising that the Southeast (+7.8%) remains the country’s strongest region, while the West (-4.2%) continues as the weakest.”
“The results released today pre-date the disruptions in the commercial banking industry which began in early March. Although forecasts are mixed, so far the Federal Reserve seems focused on its inflation reduction targets, which suggests that interest rates may remain elevated, at least in the near-term. Mortgage financing and the prospect of economic weakness are therefore likely to remain a headwind for housing prices for at least the next several months.”
Selma Hepp, CoreLogic Chief Economist, shared the following statement on factors influencing the present housing market:
“While lower mortgage rates helped entice some potential homebuyers off the sidelines this year, the U.S. housing market continues to face many headwinds, including pessimistic consumer sentiments, fears around recent banking turmoil, the lack of a seasonal spring home supply uptick and continued mortgage rate volatility. Nevertheless, the typical spring demand rush and the continued lack of homes for sale lifted prices in February, following seven months of monthly declines.”
“When the latest data is released tomorrow, Tuesday morning, Selma will share an additional quote which I'll share with you just after 9 a.m. ET. Let me know if you'd like to connect you to Selma who could share more on this month's trends and what homebuyers should keep in mind."