By Nicole Friedman
Home prices posted their first year-over-year price decline in 11 years in April, as higher mortgage rates made home purchases more expensive for buyers.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures home prices across the nation, fell 0.2% in April, compared with a 0.7% annual growth rate the prior month. The annual decline was the first for the index since April 2012.
Compared with the prior month, the index rose 0.5% in April on a seasonally adjusted basis, the third straight monthly increase.
Mortgage rates rose rapidly in 2022, causing a major slowdown in home sales as buyers backed away from the market. House-buying affordability in April fell to its lowest level since November, according to the Federal Reserve Bank of Atlanta.
But prices haven’t declined as much as many economists expected, because the higher mortgage rates made current homeowners reluctant to sell, keeping the supply of homes on the market lower than normal.
The average rate for a 30-year fixed mortgage was 6.67% in the week ended June 22, up from 5.81% a year earlier, according to Freddie Mac.
The Case-Shiller index, which measures repeat-sales data, reports on a two-month delay and reflects a three-month moving average. Homes usually go under contract a month or two before they close, so the April data is based on purchase decisions made early this year or late last year.
“The U.S. housing market continued to strengthen in April,” said Craig Lazzara, managing director at S&P Dow Jones Indices. “Home prices peaked in June 2022, declined until January 2023, and then began to recover.”
The median existing-home price fell 3.1% in May from a year earlier to $396,100, according to the National Association of Realtors.
The Case-Shiller 10-city index fell 1.2% over the year ended in April, following a 0.7% decline in March. The 20-city index fell 1.7%, after an annual decline of 1.1% in March.
Economists surveyed by The Wall Street Journal expected the 20-city index to decline 2.4%.
Miami had the fastest annual home-price growth in the country, at 5.2%, followed by Chicago, at 4.1%. The weakest market was Seattle, where prices fell 12.4% on an annual basis.
A separate measure of home-price growth by the Federal Housing Finance Agency also released Tuesday found a 3.1% increase in home prices in April from a year earlier. The FHFA index rose 0.7% in April from the prior month on a seasonally adjusted basis.