Lower mortgage rates in late January and early February brought buyers off the sidelines and reignited competition for well-priced homes as inventory continued to shrink.
The Black Knight Home Price Index for February shows the predictable consequence of this shift with a modest rebound in home prices in 78% of the 50 largest U.S. markets.
THE FIRST NATIONAL INCREASE IN HOME PRICES IN 8 MONTHS
In the early part of February, when mortgage rates declined, buyers were quick to take advantage and bidding wars returned as competition over limited inventory heated up.
Home prices increased In 39 of the 50 largest U.S. metros—a dramatic turnaround from just three months prior when 48 of those 50 were seeing home price declines.
February registered a 0.16% seasonally-adjusted month-over-month national increase—the first we’ve seen in eight months.
While some price increases—most notably in Miami, which saw the largest of the month—can be chalked up to people moving to the area, we’re seeing stronger price gains more generally in those areas with better affordability and larger inventory deficits.
Andy Walden
Black Knight Vice President of Enterprise Research
Meanwhile, national annual price growth continues to drop, falling below 2% (to 1.94%) for the first time since 2012. While that number is still on track to slip below 0% this April, if easing mortgage rates and inventory shortages persist, it may climb back into positive territory later in the year.
The unfortunate reality is that the scarce supply of inventory that’s the source of so much market gridlock isn’t getting any better. In fact, seasonally adjusted inventory levels continued to deteriorate in February, marking not only the fifth straight month of such declines, but also the largest inventory deficit we’ve seen since May of last year, with more than 90% of markets seeing such deficits grow in February.
Andy Walden -Black Knight Vice President of Enterprise Research
Posted by:
Apr 4, 2023
