June U.S. Home Price Update

First signs of slowing but still a big monthly gain

Summary

• U.S. home prices rose 1.5% month over month in April, which is fast but slower than last month’s change of 2.1%

• Tampa and Miami lead the way for cities in annual increases at 35.8% and 33.3%, respectively, and Minneapolis saw the least growth with 12.3%

• Nominal home prices are high compared to trend but remain below levels seen prior to the 2008 Financial Crisis for some relative metrics (though that gap continues to close each month)

Trend and Change

National home prices, in aggregate, have seen a sharp acceleration above trend since the onset of the pandemic:

While we saw some moderation in the pace of increase a few months ago, it recently re-accelerated significantly with this month showing the first reversal of that trend:

City-by-city Details

Miami, Dallas, and Tampa saw big monthly gains in April:

And, many cities grew at rates faster than the national average:

On an annual basis, Miami and Tampa have outpaced the pack:

On a five-year basis Phoenix and Seattle also stand out:

On a ten-year basis, there are some notable laggards including Chicago, New York, Washington, D.C., and Cleveland:

Rates and Supply

Mortgage rates have seen a nearly unprecedented jump in recent months:

Supply of new housing has jumped significantly lately:

Relative Valuation

The price-to-rent ratio continues to rise but is below twenty-year highs:

Price relative to income continues to climb:

And inflation-adjusted home prices are rising quickly even though inflation is running extremely hot:

However, homes relative to the market continue to look reasonable (for now):

The first four months of the year were pretty shocking for price increases. It will be interesting to see what the rest of 2022 has in store for us.

---

Have a question you want to ask or a topic you’d like to see covered? Let me know!