National home price gains advanced at a “slow and steady” pace in April, signaling firmer price behavior as the spring buying season got underway this year, new data shows.
Updating its monthly Home Price Index this week, real estate market analytics firm Cotality reported a 0.4% monthly rise in home prices from March to April. Accelerated growth occurred in metro markets across the Midwest and Northeast, tracking with similar price trends in recent quarters.
On an annual basis, home prices increased 0.4%, capping nationwide year-to-date appreciation of 0.8% that Cotality described as “below average for recent years.” Consecutive years of double-digit appreciation during the COVID-19 pandemic significantly distorted historical home price-trends since 2020.
But the report also flagged a divergence in price performance across metros based on the prevalence of all-cash buyers.
“Market strength suggests that some buyers remain insulated from mortgage-rate volatility and are supported by substantial home equity and stock market gains,” explained Selma Hepp, chief economist at Cotality, in the report. However, in markets that “depend more heavily on traditional mortgage financing,” mortgage rate-sensitive buyers “are seeing prices stay relatively flat,” Hepp continued.
Markets with elevated mortgage utilization rates may also see stronger mortgage rate lock-in effects sidelining repeat buyers, thereby increasing the portion of affordability-strapped first-time homebuyers among active purchasers.
Mortgage affordability declined for the second consecutive month in April as mortgage rates have risen sharply since the start of the ongoing Iran war in late February. Median new purchase mortgage payments of $2,152 in April, according to Mortgage Bankers Association data, were roughly 4.4% higher than pre-war levels.
Despite the broad reversal in affordability gains, “fewer markets posted year-over-year price declines in April than in prior months, pointing to continued stabilization across the housing market,” added Hepp.
On a three-month trended basis, St. Louis, Kansas City and Milwaukee posted gains well above the year-to-date average, notching 4.1%, 4% and 3.6% growth respectively. Across the Northeast, Newark, N.J. observed 6.4% growth over the three previous months, while Rochester, N.Y., and Boston posted 5.9% and 4.9% respective gains.
By state, Maine observed the largest annual growth in April with 7.3% growth in aggregate home prices, with Illinois and Connecticut also recording outsized gains of 5.7% and 5.1%.
Eleven states and state equivalents posted annual price declines in April, with South Dakota, Hawaii, Washington, D.C., and Florida and Washington topping that list.
