Two widely cited home price measures confirm that the price drops halted in the early weeks of 2023. But downward pressure on prices remains.

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The national slide in home prices dating back to the summer was arrested in the early weeks of 2023, two widely cited measures confirmed this week.

Home prices rose between 0.2 percent and 0.5 percent from January to February, according to price indexes from S&P CoreLogic Case-Shiller and the Federal Housing Finance Agency, respectively. 

These two measures peg year-over-year home-price growth somewhere between 2 percent and 4 percent — a consensus range that falls below the normal pre-pandemic annual rate of price growth.

“This increase was, in part, due to a decline in mortgage rates by more than half a percentage point from the peak reached in early November as well as historically low housing inventory,” said Nataliya Polkovnichenko, supervisory economist in FHFA’s Division of Research and Statistics. 

The upward momentum in home prices in February coincided with the customary ramp-up in demand heading into the spring, when homebuying accelerates most quickly heading into the peak summer months.

It remains to be seen whether these home-price gains are a mere springtime blip in a longer-term downward trend or whether they’ll mark a reversal in the coronavirus pandemic home-price correction. What they reflect for now is that the market remains characterized by tight inventory and substantial competition for homes in the more affordable range.

Some of the factors placing downward pressure on home prices won’t be going away any time soon, S&P DJI Managing Director Craig Lazzara said in a statement. 

“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 in the statement. “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.”

These results reflect a time before the collapse of Silicon Valley Bank, when new uncertainty emerged in the banking system, Lazzara added.

Although national home prices reflected a relatively small year-over-year growth, the effect of the last year was felt very differently from one region to another. 

Home prices in Miami were up 10.8 percent year over year, according to the Case-Shiller index. Tampa, Atlanta and Charlotte were among the markets with the greatest price growth over the past 12 months as well.

But pricier markets in Western states experienced annual home-price reductions at that time. San Francisco, San Diego, Seattle and Portland had already recorded annual home-price losses by January. The next month, four other Western markets joined them as Las Vegas, Phoenix, Los Angeles and Denver posted year-over-year declines.

Email Daniel Houston

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