Home prices rose again in March

New data from Black Knight’s monthly Mortgage Monitor found home prices rose again in March. Additionally, with recent revisions to data from January and February showing positive price growth in each month, March is now the third consecutive month of price increases.

Seasonally-adjusted, March home prices grew by 0.45 percent – the strongest single-month gain since May 2022. These gains have approximately 40 percent of major U.S. markets back near pandemic-era peaks.

New York, Detroit, Birmingham, Ala., Orlando, Fla., Houston, and the District of Columbia are all within 1 percent of last year’s peak prices.

Cities on the west coast are not seeing quite the same level of price resurgence, however, with Austin, Texas, San Jose, Calif., San Francisco, Seattle, and Phoenix, still more than 10 percent off from peak price levels.

Nationally, home prices are now just 1.7 percent off the June 2022 peak.

“Despite the home price strengthening of these past couple of months, the backward-looking annual growth rate continued to cool as the influence of the red-hot spring 2022 market fades in the rearview mirror,” Andy Walden, Black Knight’s vice president of enterprise research strategy, said. “Prices are now up just 1 percent year-over-year, with the annual growth rate on track to fall to roughly 0 percent by April. That said, low inventory levels will limit just how far that metric will fall in coming months.”

Inventory shortages continue to be the primary driver in home price growth. Black Knight’s data found real estate listings for March 2023 were 30 percent lower than the same month average for 2017-2019, a negative percentage difference which has seen month-over-month growth for seven consecutive months.

“Our collateral analytics data showed the supply of active listings fell for the sixth straight month, to the lowest level since April 2022,” Walden said. “On top of that, March saw deterioration in supply among 90 percent of major markets. New listings aren’t filling the gap either – 30 percent fewer properties hit the market in March as compared to pre-pandemic norms. That deficit’s now increased in each of the last six months and is up from -27 percent in February and -25 percent the month before. Given the modest rise in sales volumes, current available inventory represents just 2.6 months of supply on a seasonally adjusted basis, tipping the scale back toward sellers in a tightly constricted market.”