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If you’ve heard that the housing market has crashed, consider this.
Nearly 40% of markets across the country have returned to peak home prices on a seasonally-adjusted basis, according to a new report from Black Knight.
These markets are primarily located in southern Florida as well as the Midwest and Northeast.
And the other six markets are within 1% of last year’s peak, meaning nearly half the country is still at all-time highs.
Of course, there are some markets on the opposite end of the spectrum as well.
The housing market hasn’t crashed yet
While housing bears are licking their chops at any moment of potentially bad news, the data tells a different story.
The Black Knight’s Latest Hostage Monitor revealed That house prices increased on both non-adjusted and seasonally adjusted basis during the month of March.
Property values increased by a seasonally adjusted 0.45% (+1.38% unadjusted) in March, marking the third consecutive month of growth.
And 92% of housing markets across the country saw an increase in prices during the month.
However, prices increased by only 1.0% on a year-on-year basis, as the rate of appreciation (which was apparently volatile) is slowing down.
According to Black Knight, the rate of appreciation has been falling by around 1.3-1.4% every month since the beginning of 2023.
A few months ago, seasonally adjusted home prices were falling month-over-month in 92% of US metros.
In March, home prices were climbing in 92% of markets compared to a month ago, which was actually 180.
But the company expects the annual growth rate in home prices to reach “nearly 0% by April”.
Short supply is pushing up domestic prices and limiting downside
The narrative of the housing market remains driven by inventory, or lack thereof. Bearers argue that home prices are unaffordable.
And while they aren’t necessarily wrong, the lack of supply has allowed home prices to stay high and even take some monthly gains.
This lack of supply is limiting downside activity, with the supply of active for-sale listings falling for the sixth straight month.
It is now at its lowest level since April of last year, driven by 30% fewer new listings hitting the market in March compared to pre-pandemic norms.
This puts current available inventory at just 2.6 months’ supply on a seasonally adjusted basis, which Black Knight describes as “the scale back toward sellers.”
So the buyer’s market we saw in 2022 may have already come and gone, although it could return if mortgage rates remain high and supply increases as the year progresses.
Where house prices remain at their peak
First, nationally, home prices are down just 1.7% from their June 2022 peak (seasonally adjusted).
This is an improvement from the -2.6% decline seen back in December.
But surprisingly, nearly 40% of the country’s housing market is at its peak, this despite mortgage rates nearing 7%.
And Birmingham, Detroit, Houston, Orlando, New York and the District of Columbia are all within 1% of their all-time highs.
Even more impressive, some metros are still seeing nearly double-digit home price increases annually.
Take Miami, where home prices are up 9.5% from a year ago, or Hartford, CT (+7.7%), Kansas City, MO (+5.5%), Cincinnati, OH (+5.2%), and Virginia Beach, VA (+5.0%).
It’s pretty incredible to see this type of gain year-over-year, given the fact that the 30-year certainty has climbed from ~3% to about 6.5% today.
Where house prices are falling the most
Of course, it’s not all good news. And real estate is always going to be local. On the other end of things, home prices are down 11.6% in San Jose compared to a year ago.
Similar declines can be seen in Austin, TX (-11.2%), San Francisco, CA (-11.1%), and Seattle, WA (-10.8%).
Property values in once-hot metros such as Sacramento, Phoenix, Las Vegas, Salt Lake City, San Diego and Los Angeles have also been affected.
The city of Austin, Texas has had it worst, with home prices now down 15.5% from their 2022 peak.
This may explain the negative sentiment from housing bears in that area of the country.
San Jose, San Francisco, Seattle, Phoenix and Las Vegas also saw double-digit declines.
But considering how much home prices have shot up in these metros, especially in such a short span of time, it is not a big surprise.
For this reason, The price change feels more like a reform than a crash Gave massive gains before the decline.
To sum things up, real estate is local. Some markets are still flourishing while others are improving.
And the housing market is facing a mortgage rate storm due to a continuing shortage of supply.
If and when that changes, the narrative may change as well.
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