Home-price appreciation slowed in February, but economic uncertainty clouds outlook
Home-price
growth
cooled
slightly
as
the
spring
purchase
season
enters
May.
The
S&P
CoreLogic
Case-Shiller
Home
Price
Index
for
February
rose
3.9%
year
over
year,
a
slight
decrease
from
the
4.1%
annual
gain
in
January.
Over
the
winter,
the
market
benefited
from
declining
interest
rates
and
rising
inventory,
allowing
some
buyers
to
enter
the
market.
But
this
occurred
before
President
Donald
Trump’s
tariff
policies
kicked
into
high
gear,
which
pushed
mortgage
rates
back
up
to
7%
and
cast
doubt
on
the
economy.
“Waning
consumer
confidence,
heightened
economic
uncertainties
and
the
future
of
household
budgets
are
impacting
the
consumer
housing
market,”
Zillow
chief
economist
Skylar
Olsen
said
in
a
statement.
“Unlike
its
normal
countercyclical
behavior,
these
early
signs
of
an
economic
downturn
have
not
brought
lower
mortgage
rates
along
with
it.”
The
rise
in
the
Case-Shiller
Index
is
largely
driven
by
the
10
largest
cities
in
the
country.
The
10-City
Composite
increased
by
5.2%
annually
in
February,
higher
than
the
4.5%
growth
for
the
20-City
Composite.
But
each
of
these
gains
were
slightly
lower
than
the
prior
month.
The
city
driving
these
increases
is
no
surprise.
New
York
City’s
year-over-year
gain
was
7.7%,
by
far
the
largest
for
February.
Chicago
(+6.6%),
Cleveland
(+6.6%)
and
Boston
(+5.9%)
also
posted
substantial
annual
increases.
Other
parts
of
the
country,
meanwhile,
are
experiencing
sagging
home
prices.
Tampa
(-1.46%)
is
the
only
city
in
the
20-City
Composite
with
an
annualized
decline.
It
also
saw
home
prices
drop
by
0.34%
compared
to
January.
While
11
of
the
20
cities
saw
prices
fall
between
December
and
January,
only
two
fell
between
January
and
February.
The
other
one
is
also
in
Florida,
as
Miami‘s
prices
dropped
by
0.27%
on
a
monthly
basis.
The
outlook
for
the
rest
of
the
spring
is
murky,
due
in
part
to
tariffs.
Despite
Trump
pausing
the
dramatic
global
tariff
regime
he
announced
on
April
2,
markets
and
households
responded
negatively,
and
an
astronomical
145%
tariff
on
China
remains
in
effect.
The
future
of
Trump’s
tariffs
is
also
cloudy,
as
he
and
members
of
the
administration
have
signaled
different
paths
forward
that
are
often
contradictory.
Public
opinion
has
soured
on
tariffs,
and
any
expectation
of
higher
inflation
could
temper
demand
for
housing.
“High
housing
costs
and
widespread
economic
uncertainty
have
curbed
buyer
enthusiasm,”
Hannah
Jones,
senior
economic
research
analyst
for
Realtor.com,
said
in
a
statement.
“Recent
data
shows
that
concerns
about
job
security
have
increased,
which
could
make
both
buyers
and
sellers
more
hesitant
to
enter
the
housing
market
until
the
outlook
for
the
economy
and
job
market
becomes
clearer.”
