Home prices aren’t showing any sign of slowing down—yet.
Prices in February in 20 of the nation’s large metros are expected to have risen at a relatively quick clip—though some cities likely saw stronger gains than others.
The S&P CoreLogic Case-Shiller Home Price index tracking changes in 20 major cities, which is set to be published on Tuesday, is estimated to have climbed 6.6% in February from the year prior, according to FactSet, tied with January’s reading. On a seasonally adjusted basis, prices are expected to have gained 0.15% month-over-month.
The data lags other releases, but is closely watched for its comprehensive methodology, which is designed to minimize the impact of home size and type, is based on a three-month moving average, and is released as both seasonally adjusted and unadjusted data sets. The data is published at a national level, as well as in indexes tracking performance in some of the nation’s largest cities.
To get a sense of how the 20 metros may have fared in February, Barron’s looked at
data capturing February’s metro-level median sale price. According to Zillow’s data, the 20 cities included in the Case-Shiller index increased an average 6.8% in February from the year prior.
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Gains measured by Zillow in February were strongest in Boston, New York, and Miami, where year-over-year price gains ranged from about 10% to 12%. Among the 20 cities, Denver, Minneapolis, and Portland, Ore., were the weakest. Prices in these metros rose between 1.5% and 3.4% from the year prior. To be sure, the Zillow data only reflects one month and includes both condos and single-family units.
Home price growth could slow in March. A Moody’s Analytics index tracking home price appreciation rose 5.9% in March, slower than the 6.1% annual gain in February. “While affordability is near a four-decade low, a limited supply of homes for sale is keeping a floor under prices,” wrote Moody’s Analytics housing economist Matthew Walsh, adding that he expects more homes to hit the market as mortgage rates fall slightly and more sellers choose to list.
It will take time for April’s home price trends to become clear—but early data suggests that quickly rising mortgage rates have had little impact on prices so far. The median home in the four weeks ended April 21 sold for $384,000, according to Redfin—up roughly 5% from a similar period one year prior.
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Stretched home affordability will catch up with prices, says Walsh—eventually. “Moody’s Analytics expects real price declines given the imbalance between median house prices and median incomes, but this adjustment process will occur over an extended time, barring a recession,“ he wrote.
Write to Shaina Mishkin at shaina.mishkin@dowjones.com
