Talks of a housing slowdown are escalating among market analysts eyeing the end to a historical real estate boom, but prices are showing no signs of dropping anytime soon. The three-month average of January, February and March home prices revealed a record 20.6% year-over-year gain, according to the most recent Case-Shiller report, and Zillow expects yet another increase in April.
Though housing supply is finally rising year-over-year, active inventory remains low across the U.S., keeping competition tight and prices high in most popular markets. Though mortgage rates are expected to take some steam out of an overheated housing market, buyers should expect a delay between rate hikes and waning home prices, says Bill McBride in the CalculatedRisk Newsletter.
The various measures of house prices use closed sales of existing homes. For March house prices, most of the contracts were signed in January and February, before the recent sharp increase in mortgage rates. Also, the Case-Shiller index is a three-month average, so “March” included sales in January and February (and many of those January contracts were signed last November). That is a significant lag in the data.
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