Fortune April 12, 2023
Seller
The home price correction may be running on fumes. At least according to the Black Knight Home Price Index, with fresh data on the nation’s 100 largest housing markets. Between January and February, the research firm said, 79 of those markets saw home prices rise, while another 19 saw declines on a month-over-month basis and two markets remained flat.
The biggest one-month gains were found in Midwestern and East Coast markets such as Dayton, Ohio (+0.75%), Miami (+0.63%), and Worcester, Mass. (+0.63%). While the sharpest one-month declines could be found in West and Southwest markets like Austin (-0.82%), Las Vegas (-0.53%), and San Jose, Calif. (-0.52%).
As 2023 housing data begins to roll in, it’s clear that the U.S. housing market has stabilized relative to the sluggish second half of 2022—a period that saw national home prices, as measured by Black Knight, fall 3% on a seasonally adjusted basis. That makes sense, Black Knight said, considering that not only has the housing market seen a seasonal spring boost, but affordability seems to have improved just enough to get some buyers off the sideline, with mortgage rates falling back under 7% and national home prices declining somewhat.
“This [uptick] has been driven by a modest improvement in affordability and, perhaps more so, a deepening of inventory supply shortages in many U.S. markets, especially in the Midwest and Northeast,” says Andy Walden, vice president of enterprise research at Black Knight. “And while prices saw a modest uptick in the Midwest, Northeast, and Southeast in February, they continued to pull back from recent peaks on a seasonally adjusted basis in many Western markets and pandemic boomtowns.”
That said, don’t mistake this for a booming housing market. According to Black Knight’s index, national home prices ticked up just 0.16% in February. If national home prices were to rise at that rate for 12 months, prices would inch up just 1.94%—tame compared to the 20% uptick in 2021.
“Despite shifting market trends, we’re not necessarily out of the woods yet when it comes to [falling] home prices,” Walden says. “Affordability, despite modest improvement, remains roughly where it was at the peak of the market in 2006 nationally, requiring approximately one-third of the median household income to afford the mortgage payment on the median-priced home purchase at today’s income and interest rate levels.”
Groups like Moody’s Analytics, Goldman Sachs, and Fannie Mae all still expect national home prices to fall this year. Forecast models produced by Moody’s and Fannie Mae both foresee U.S. home prices falling 4.2% in 2023. Not everyone is as bearish. Indeed, CoreLogic and Zillow believe that on a nationally aggregated level, the home price correction is over. Heading forward, Zillow expects U.S. home prices as measured by its Zillow Home Value Index to rise 1% between February 2023 and February 2024. Meanwhile, CoreLogic expects a 3.7% national home price uptick between February 2023 and February 2024.
On Tuesday, CoreLogic’s chief economist Selma Hepp wrote that the February home price uptick indicates “that prices in most markets have already bottomed out.”
“The divergence in home price changes across the U.S. reflects a tale of two housing markets. Declines in the West are due to the tech industry slowdown and a severe lack of affordability after decades of undersupply. The consistent gains in the Southeast and South reflect strong job markets, in-migration patterns and relative affordability due to new home construction,” wrote Hepp.
The February uptick doesn’t mean we’re back to the Pandemic Housing Boom peak.
In fact, among the 100 largest markets tracked by Black Knight, 75 housing markets remain below their 2022 peak price. Meanwhile 25 markets are back—or above—their 2022 peak. The markets where home prices are down the most since the peak includes places like San Jose (-13.6%); San Francisco
(-13.1%); Austin (-12.4%); Seattle (-11.8%); Stockton, Calif. (-10.4%); Phoenix (-10.3%); Las Vegas (-9.9%); Sacramento (-9.7%); Boise (-9.6%); and Salt Lake City (-8.8%).
Nationally, home prices are still down 2.6% from the 2022 peak, according to the Black Knight Home Price Index.
Stay up to date on the latest real estate trends.
December 4, 2024
Once the celebrations wind down, you’ll be left wondering what to do with all the extra food and treats piling up.
December 4, 2024
Even the biggest travel fiends will admit that a busy travel schedule can leave you feeling more tired and in need of a vacation than before you actually left on vacat… Read more
December 4, 2024
A lot of people assume spring is the ideal time to sell a house.
December 4, 2024
December 3, 2024
Amid the holidays brimming with social events, gift-giving can sometimes be a mad scramble.
December 3, 2024
There have been many food trends that have taken off on TikTok: There was the sleepy girl mocktail—a mixture of magnesium, seltzer, and tart cherry juice—scrambled pan… Read more
We Guide Homeowners through the complicated process of selling their home using our 4 Phase Selling Process and 3 Prong Marketing Strategy that alleviates their stress and moves them effortlessly to their next destination. Schedule a 15 Minute Complimentary Strategy Session Today