While U.S. home prices continue to rise, the rate of growth hit a 13-year low in March, according to the latest Home Price Index (HPI) report from First American Data & Analytics.
Home prices rose 1.8% year over year in March — the lowest rate since 2012. Compared to the prior month, home prices rose 0.5% in March, according to HPI data.
“National house price growth slipped below 2% for the first time since 2012, amid strained affordability and heightened economic uncertainty,” wrote Mark Fleming, chief economist at First American. “Wary potential homebuyers are adopting a ‘wait-and-see’ approach, curbing demand while inventory continues to drift higher.”
Fleming added that a “silver lining” is that “household income growth is now outpacing house price appreciation, allowing potential buyers’ incomes to narrow some of the affordability gap, if mortgage rates hold steady.”
HPI data shows that New York’s Nassau County on Long Island had the highest year-over-year home price increases in March at 6.5%. Other top gainers included Cambridge, Mass. (up 4.8%); Warren, Mich. (up 4.8%); Pittsburgh (up 4.8%); and Baltimore (up 4.1%).
Areas that had the biggest yearly declines in home prices in March included Tampa, Fla. (down 4.8%); Oakland, Calif. (down 4.5%); Orlando, Fla. (down 1.8%); and Denver (down 1.5%).
Fleming observed that excess inventory levels drove price drops in many markets.
“House prices declined year over year in nine of the top 30 markets we track, with all nine located in the South or West,” Fleming noted. “Notably, markets with some of the steepest increases in annual inventory levels, such as Denver and Orlando, Fla., have the deepest price declines. Conversely, house price appreciation remains strong in the Northeast and Midwest, where inventory has lagged behind.”
