The risk of a "sustained downturn" in the housing market is rising, as home prices show further signs of cooling off.
- 🏷️ Home prices rose 2.7% nationally in April, compared with a year earlier, down from a 3.5% jump in March, according to the S&P CoreLogic Case-Shiller Index released today.
- ⚠️ April had the smallest annual price gain in nearly two years, S&P noted.
- 📉 And on a seasonally adjusted basis, prices fell 0.4% nationally from March.
What they're saying: That decline "raises the risk that prices are entering a sustained downturn, as the market finally buckles under the weight of near-7% mortgage rates," Capital Economics North American economist Thomas Ryan wrote today.
- "Clearly, the existing homes market is losing momentum," Ryan added, citing sky-high borrowing costs and rising supplies pressuring sellers' price expectations.
Zoom in: Other recent datapoints also point to the housing market losing steam.
- Sales of existing homes fell 0.7% in May from a year earlier, according to data from the National Association of Realtors released Monday.
- And median home sale prices rose just 0.7% year over year in May — the slowest growth in two years, Redfin notes.
Reality check: Inventory, though rising, remains relatively tight as homeowners continue to cling to lower mortgage rates, which will likely prevent prices from seeing a significant correction.
