Today’s S&P/Case-Shiller National Home Price Index increased 5.15% year-over-year in March 2016, which is the 47th consecutive month of positive gains. March is also the second straight month in which the year-over-year figure decreased over the previous month. This is a sign that the U.S. housing market is stabilizing in the wake of strong price appreciation between 2012 and 2014.
While the S&P/Case-Shiller National Home Price Index is an important metric to watch, it’s worth noting that the measure is more reflective of price movements in premium homes rather than middle or lower tier homes.
Prices in last month’s three hot markets – Portland, Seattle, and Denver – continue to lead the pack with increases between 10% to 12.3%. While strong price growth in these markets should help increase inventory in the coming months, homes will be significantly less affordable for homebuyers than this time last year.
Finally, growth in San Francisco home prices continues a noticeable slowdown with year-over-year increases of 8.5%, which is the smallest annual gain since January 2015. The continued slowdown suggests the San Francisco housing market may finally be entering a phase of normalcy after years of sustained price appreciation.
