Real Estate News in Brief
Home price declines may already be over. The Case-Shiller index showed that national home prices increased for the 2nd-straight month, with most of the big cities posting gains. Meanwhile, good news on the debt ceiling and Fed commentary about potentially ‘skipping’ a rate hike in June helped send mortgage rates back below 7%.
The Case-Shiller national home price index rose 0.4% MoM on a seasonally-adjusted basis for March 2023, accelerating from +0.2% MoM in February. The national index is now down just 2.3% from its peak in June 2022.
While 10 of the big 20 cities are now seeing YoY price decreases (prices peaked between May-Aug 2022), the momentum has already turned positive: 15 of cities experienced price increases on a MoM basis in March (up from 8 in February). Hard-hit San Francisco’s home price index rose for the first time since May 2022. [Case-Shiller]
FHFA’s national price index, meanwhile, showed a 0.6% MoM increase in March. That’s the 3rd-straight month of improvement. [FHFA]
According to the JOLTs report, the number of job openings rose ~360,000 in April 2023 to 10.1 million, beating estimates and effectively reversing the decrease we saw last month. That said, the number of job openings is down 14% from April 2022 and down 16% from its peak of 12.0 million in March 2022. Prior to COVID, the number of job openings was ~7.0 million. [BLS]
A day later, ADP’s National Employment Report showed that private employers added 278,000 jobs in April, also higher than expectations. Annual wage growth, however, slowed to 6.5% in May (it was +6.7% in April and the peak was +7.8% in September 2022). [ADP]
Mortgage rates improved significantly (moved back below 7%) in response to: 1) a political agreement to increase the debt ceiling, and 2) commentary from two Fed members that a “skip” (not raising rates at the next meeting) was advisable and possible. [Mortgage News Daily]
Redfin reported that purchases by property investors dropped nearly 50% YoY in the first quarter of 2023. Much higher mortgage rates and declining prices have moved many investors to the sidelines. Interesting anecdote: in Phoenix, 31% of the homes sold by investors in March were at loss. [Redfin]