Home prices surged to another record high in April
U.S. home prices climbed to another record high in April, as inflation continued to run hot across the housing market in the spring.
The latest S&P CoreLogic Case-Shiller index released Tuesday put the annual increase in the cost of a home at 20.4% in April, down slightly from the prior month’s upwardly revised jump of 20.6%.
The pace of increases slowed marginally for the first time since November in a potential sign home prices may be beginning to cool, but many cities across the country continued to see prices soar at a quickened pace.
“April 2022 showed initial (although inconsistent) signs of a deceleration in the growth rate of U.S. home prices,” Craig Lazzara, managing director at S&P DJI, said in a statement. “We continue to observe very broad strength in the housing market, as all 20 cities notched double -digit price increases for the 12 months ended in April. April’s price increase ranked in the top quintile of historical experience for every city, and in the top decile for 19 of them.”
Cities that saw the biggest price accelerations were Tampa, Miami and Phoenix, with year-over-year home prices gains of 35.8%, 33.3%, and 31.3%, respectively.
Moreover, S&P CoreLogic Case-Shiller’s 10-city composite registered an annual increase of 19.7%, climbing from 19.5% in March. The 20-city composite saw an annual gain of 21.2% compared to 21.1% during the prior month.
Meanwhile, the Federal Housing Finance Agency’s House Price Index showed month-over-month price growth at 1.6% in April. The figure came in marginally higher than the 1.4% rise economists surveyed by Bloomberg had projected, and was up from last month’s read of 1.5%.
Over the prior year, FHFA data showed home prices rose 18.8% in April.
Further weighing on the affordability of home ownership was a jump in the cost of financing a house as the Federal Reserve raises borrowing costs to slow surging inflation.
Last week, the rate on the 30-year fixed mortgage increased to 5.81%, according to Freddie Mac, the highest level since November 2008 and more than 2.5 percentage points higher since the start of the year.
April’s data on home prices also pre-dates the U.S. central bank’s latest 75 basis point rate hike. The recent surge in mortgage rates to 6%, however, has led to some weakening in the housing market, with Powell deeming current financing conditions a “reset” for the housing market in a recent press conference.
“We noted last month that mortgage financing has become more expensive as the Federal Reserve ratchets up interest rates, a process that had only just begun when April data were gathered. A more challenging macroeconomic environment may not support extraordinary home price growth for much longer,” Lazzara said.
Still, the median list price for a U.S. home was $447,000 in May, up 18% from the same period last year, according to data from Realtor.com.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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