U.S. home prices rose just 0.8 percent year-over-year in April, according to the S&P Cotality Case-Shiller National Home Price Index. It’s a number that sounds like growth but functions like stagnation once inflation is factored in.
That’s because April marked the 11th consecutive month that home values fell in real terms, with 3.8 percent inflation running roughly three percentage points ahead of nominal price gains. The national index ticked up only slightly from March’s 0.7 percent annual pace, extending a stretch where housing has been treading water rather than building wealth.
A stark regional price split
The regional split tells the sharper story. Chicago posted the strongest annual gain among the 20 cities tracked, up 6.5 percent, followed by New York at 3.8 percent and Cleveland at 3.2 percent.
Seattle was the weakest market, down 2.3 percent year-over-year, with Denver, Tampa, Dallas and Phoenix all posting declines between 1.6 percent and 1.9 percent.
That’s a nearly nine-percentage-point gap between the best- and worst-performing metros in a single month, a divergence that’s become the norm rather than the exception.
“Geographic dispersion remains pronounced,” said Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones Indices. “Midwest and Northeast markets are still leading moderate growth, while many Sun Belt and Western metros see ongoing declines.”
The pattern holds across the broader composites.
The 10-City Composite rose 1.8 percent annually, up from 1.5 percent in March, while the 20-City Composite climbed 1.1 percent, up from 0.9 percent. Both remain well below the pace needed to outrun inflation.
Month-over-month, the picture gets murkier depending on which adjustment you’re reading. On a non-seasonally adjusted basis, the National Index rose 0.8 percent from March, reflecting the market’s typical spring bounce.
Strip out seasonal effects, though, and the National Index actually dipped 0.1 percent, with the 20-City Composite essentially flat at -0.04 percent.
Godec pointed to the six-month trend as the more useful signal. There was a 1.35 percent national increase over the past six months, offsetting a 0.5 percent decline in the six months before that.
“This represents a modest shift in direction, but remains limited in the context of rising costs,” Godec said.
Higher rates keep price growth in check
Mortgage rates are doing much of the work to keep that shift modest.
After dipping below 6 percent earlier in the year, 30-year rates climbed back to 6.3 percent in April, Godec said, keeping financing costs elevated enough to cap price growth even in markets with real demand.
“In this higher-rate environment, home price growth remains constrained, with housing largely treading water in nominal terms and falling in real terms,” Godec said.
A separate release from the Federal Housing Finance Agency, using purchase-only data from Fannie Mae and Freddie Mac, showed prices actually fell 0.1 percent month-over-month in April, though they were still up 2 percent from a year earlier.
FHFA’s data showed an even wider regional split than Case-Shiller’s.
Seasonally adjusted monthly changes ranged from -0.8 percent in the Mountain division to +1.0 percent in New England, while 12-month changes spanned from +0.2 percent in the Pacific division to +4.4 percent in the East North Central division.
FHFA’s next report, covering May data, is due July 28.
