US home prices rose slightly in February, snapping a seven-month streak of month-over-month declines, according to the latest S&P CoreLogic Case-Shiller US National Home Price Index, released Tuesday.
After seasonal adjustment, the national index posted a month-over-month increase of 0.2%. The national composite index now stands 4.9% below its June 2022 peak. Both the 10-City and 20-City composites posted month-over-month increases of 0.1%.
Prices are still rising on a year-over-year basis, but the amount of that price growth has been getting smaller for the past several months.
Year over year, the national index is only 2% above the February 2022 level, down from a 3.7% year-over-year gain in the previous month. The 10-City composite index had an annual increase of 0.4%, down from 2.5% in January, while the 20-City Composite posted a 0.4% year-over-year gain, down from 2.6% in January.
The index for February confirmed reports of decelerating prices continuing into 2023, said Danielle Hale, Realtor.com’s chief economist.
“The national index measured larger home price increases than the city-based composite indices,” said Hale. “The indices track price figures for the months of December, January and February, a period that included some of the lowest readings on existing home sales in more than 12 years, followed by a notable bounceback in February.”
During that period, mortgage rates fell from November’s highs of above 7% to just above 6%, a low not seen since September, before climbing up a bit, according to average weekly rates from Freddie Mac.
“February home sales data suggest that a good number of buyers who had been sitting on the sidelines took advantage of this reprieve in mortgage rates,” Hale said.
But prices were different in the West, where cities saw year-over-year declines in prices.
“February’s results were most interesting because of their stark regional differences,” said Craig Lazzara, managing director at S&P Dow Jones Indices.
Miami again had the biggest year-over-year price gain in February, followed by Tampa, Florida; and Atlanta. Miami had a year-over-year price increase of 10.8%, followed by Tampa with a 7.7% increase and Atlanta with an 6.6% increase.
In January, four West Coast cities — San Francisco; Seattle; San Diego; and Portland, Oregon — saw year-over-year price declines. In February those cities were joined by four others in the mountain and coastal west: Las Vegas, down 2.6%; Phoenix, down 2.1%; Los Angeles, down 1.3%; and Denver, down 1.2%.
The Southeast remains the country’s strongest region, with prices up 7.8%, while the West continues as the weakest, with prices down 4.2%.
February’s results, Lazzara said, pre-date the disruptions in the banking industry that began in March.
“Although forecasts are mixed, so far the Federal Reserve seems focused on its inflation-reduction targets, which suggests that interest rates may remain elevated, at least in the near term,” Lazzara said.
“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,” he said.