Home-Price Growth in Major US Cities Surges, Putting Pressure on Buyers
In March, home-price growth in 20 major US cities accelerated, posing challenges for buyers as the key selling season begins. According to an S&P CoreLogic Case-Shiller index, prices in these cities rose by 7.4% from the previous year, exceeding the 7.3% gain in February. This surge in prices is exacerbating the affordability crisis faced by homebuyers, especially with mortgage rates hovering around 7% and continuing to rise. The lack of available homes for sale is a major factor driving up prices, as many homeowners are reluctant to sell due to locking in low mortgage rates in the past. Although there has been a slight increase in listings recently, inventory levels remain historically low.
San Diego Leads the Way in Home-Price Growth Among Major US Cities
Among the 20 cities included in the index, San Diego saw the largest annual price gain, followed by New York and Cleveland. Price growth in these major cities has outpaced national averages, which rose by 6.5% in March. The Northeast region has been highlighted as a top performer in terms of home-price growth, with northern metro cities experiencing significant gains in recent years. Despite a slight easing in month-over-month gains, the overall trend points towards a moderation in home-price growth, inventory levels, and home sales in the coming months.
Expert Predicts Cooling Housing Market Amid Rising Mortgage Rates
Realtor.com Senior Economist Ralph McLaughlin predicts a slowdown in home-price growth, inventory levels, and home sales in the future housing market data releases. This comes in light of the surge in mortgage rates between March and May, which is expected to impact the housing market dynamics. As buyers continue to face challenges with affordability, the housing market is likely to see a shift towards a more balanced and sustainable growth pattern in the coming months.
In conclusion, the accelerated home-price growth in major US cities is putting pressure on buyers and exacerbating the affordability crisis in the housing market. With rising mortgage rates and limited inventory, experts predict a moderation in price growth and sales activity in the near future. Buyers and sellers alike should be prepared for a shifting market landscape in the coming months.