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The most recent S&P CoreLogic Case-Shiller Index, released today, drew concern among some of the nation’s leading economists for the past several weeks, particularly those keeping a close eye on the housing market. But while some housing experts feared the report would signal an impending market crash, the reality is more optimistic, according to Realtor.com.
Home prices continued to rise in June in all 20 major metro markets seeing monthly price increases, but despite those monthly gains, the National Home Price Index was flat year-over-year. Low inventory is propping up home prices and leading to slower sales and increased competition for available homes. Continued strength in the housing market is good news for the economy, but it means buyers bogged down by persistent affordability challenges still face a long road to homeownership.
Today’s market offers buyers the frustrating combination of low inventory and high home prices. Many existing homeowners remain on the sidelines of the market, content to stay put as mortgage rates reach 20-year highs. As a result, home shoppers are seeing fewer existing homes for sale and facing more competition for the homes available. Builders have started to pick up construction activity to fill this gap, but remain cautious as affordability challenges continue to stifle buyer demand. After two months of annual declines, home prices climbed compared to the previous year for the last four weeks which, combined with higher mortgage rates, means that buyers have yet to see relief from the high cost of homeownership.
