Home prices continue to climb across the country, reaching a record high in April. Growth, however, is slowing.
Prices rose 2.7 percent compared to the same time last year, according to the S&P CoreLogic Case-Shiller national home price index released Tuesday. April’s figure, not adjusted for seasonality, is the index’s highest since it began in 1987.
However, April’s increase reveals some tempering in the market. That month’s rate was 0.7 percentage points lower than March’s growth rate of 3.4 percent. January and February’s rates were also higher.
The housing market is at a transition point, said Sam Chandan, a real estate economist at New York University.
“Indications are that we’re seeing greater balance between buyers and sellers,” he said. “While the momentum appears to be slowing, we still have record-high prices, record-low affordability.”
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The market is contending with a range of factors contributing to slowing price growth. These include an uptick in single-family home completions, the potential for increased construction costs from tariffs, a squeeze on laborer availability given Trump’s crackdown on undocumented workers and an unstable job market, Chandan said.
Additionally, sales have been sluggish as high mortgage rates and geopolitical events have spooked some home buyers from closing deals. In March, home sales dropped by 5.9 percent from the month before and 2.4 percent year over year, according to the National Association of Realtors. May fared better for sellers, as sales inched up by 0.8 percent from April, but on a year-over-year basis, sales were down by 0.7 percent, according to NAR.
“We are starting to see that buyers’ sense of urgency, their own perceptions of what’s happening with price appreciation and availability — there’s been a little bit of a shift there,” Chandan said. “If buyers don’t feel that urgency, that’ll take some of the pressure off of house prices.”
Case-Shiller’s composite index that analyzes prices for the top 20 metropolitan areas was 3.4 percent higher year over year. This index’s growth is also slowing. April’s figure was down from March’s 4.1 percent annual growth.
New York and Chicago experienced the greatest one-year changes in home prices, about 8 percent and 6 percent, respectively.
Dallas and Tampa were the only metros whose index levels fell year over year. Dallas was down by 0.2 percent and Tampa by 2.2 percent.
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