Highlights
- National home prices rose by 2.0% YoY in February 2023
- Miami, Tampa, and Atlanta reported the highest YoY gains among the 20 cities
- West Coast cities, Las Vegas, Phoenix, Los Angeles, and Denver experienced negative YoY territory
Overview
S&P Dow Jones Indices (S&P DJI) has released the latest data for the S&P CoreLogic Case-Shiller Indices, which is the leading measure of U.S. home prices. The data for February 2023 shows a slight increase in the national composite, but eight out of the 20 major metro markets experienced a decrease in prices.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported a 2.0% annual gain in February, which is down from 3.7% in the previous month. Miami, Tampa, and Atlanta had the highest year-over-year gains among the 20 cities in February.
Craig J. Lazzara, Managing Director at S&P DJI, said that the national home price trends moderated in February 2023. The National Composite rose 0.2% in February and is currently 4.9% below its June 2022 peak.
The 10- and 20-City Composites performed similarly, with February gains of 0.3% and 0.2%, respectively. The results were most interesting because of their stark regional differences. Miami was the best-performing city for the seventh consecutive month, while the West remains the weakest region.
Lazzara also said that the results released pre-date the disruptions in the commercial banking industry which began in early March. The Federal Reserve seems focused on its inflation-reduction targets. This 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.
FHFA: US House Prices See Slight Increase in February
According to the Federal Housing Finance Agency (FHFA), U.S. house prices rose by 0.5% in February compared to January, as reported in the seasonally adjusted monthly House Price Index (HPI®). From February 2022 to February 2023, house prices increased by 4.0%. The previously reported 0.2% increase for January 2023 was revised down to 0.1%.
The seasonally adjusted monthly price changes from January 2023 to February 2023 ranged from -0.4% in the South Atlantic division to +2.3% in the East South Central division for the nine census divisions. The 12-month changes were -2.7% in the Pacific division to +8.3% in the East South Central division.
The slight increase in U.S. house prices in February was due to a decline in mortgage rates by over 0.5% from the peak in early November and historically low housing inventory. Dr. Nataliya Polkovnichenko, Supervisory Economist in FHFA’s Division of Research and Statistics, made this attribution.
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