Case Shiller Home Prices: Surprise Gains

Bottom Line:  Home prices rose for only the second time in nine months in March, countering expectations for a flat nationwide reading. A bit over half the markets in the 20-city index saw gains, with Detroit and Portland leading, up over 1.4% on the month. Los Angeles and San Francisco saw continued declines, down -0.35% and -0.9%, respectively, but San Diego saw robust gains. Elsewhere in the western sunbelt, Phoenix was down nearly -0.4%, but Vegas was up 0.4%. Florida saw modest gains in most areas, as the Northeast and Midwest also saw gains in most areas. Overall, the sharp correction in home prices due to higher mortgage rates appears to be ending, with prices in most markets finding a new equilibrium amid lower affordability. We expect prices to continue to stabilize over the remainder of 2023 as supply remains tight and regular demographic-led demand continues.