Home-price growth started to slow in the US in April.
A national measure of prices climbed 20.4% in April, down from the 20.6% gain in March, the S&P CoreLogic Case-Shiller index showed Tuesday. Craig Lazzara, a managing director at S&P Dow Jones Indices, noted that April data was showing initial, but inconsistent, signs of a deceleration in price gains.
Mortgage rates have nearly doubled since the end of 2021. The run-up in rates, combined with high prices, are squeezing potential buyers and starting to slow housing markets in some of the most popular pandemic boomtowns.
Seattle’s housing market is cooling, too.
Local home prices were still climbing this spring, but at a slower pace than the month before, according to the index. Seattle-area prices were up 26.1% in April compared to the same time last year, down from the 27.7% year-over-year increase in March. And the uptick from March to April, 2.3%, was less than half the jump a month earlier.
That echoes more recent data from the Northwest Multiple Listing Service showing fewer people in the Seattle area buying homes and prices leveling off.
The Case-Shiller index tracks single-family home prices in areas of King, Pierce and Snohomish counties and lags by two months.
Still, Lazzara noted that growth rates are strong by historical standards. A measure of prices in 20 U.S. cities accelerated, climbing 21.2% in April following a 21.1% gain in March, according to the index. Tampa, Florida; Miami and Phoenix had the biggest gains.
“Mortgage financing has become more expensive as the Federal Reserve ratchets up interest rates, a process that had only just begun when April data were gathered,” Lazzara said in a statement. “A more challenging macroeconomic environment may not support extraordinary home price growth for much longer.”
The housing market slowdown is having ripple effects across the industry. Mortgage lenders are forecasting a slump in business and brokerages including Compass and Redfin are laying off workers.
The index, which accounts for more than 27 years of data, is an important gauge of the health of the U.S. housing market in part due to its breadth of measurements around the country.
(Seattle Times business reporter Heidi Groover contributed to this story.)