US Home Prices Dropped In March For First Time In Over 2 Years

For the first time since January 2023,US Home Prices, according to S&P CoreLogic Case-Shiller’s 20-City Composite Index, fell (-0.12% MoM) in March (the latest data available). That dragged the YoY change in home price down to +4.07%, the lowest since August 2023

Source: Bloomberg

Tampaprices continue to tumble…

Source: Bloomberg

Arguably, (lagged) mortgage rates dipped during that period (positive short-term for the highly smoothed and lagged Case Shiller series), but as is clear, the next couple of months do not bode well…

Source: Bloomberg

However, home price appreciation does seem to track very closely with bank reserves at The Fed (6mo lag), which implies prices are going continue to lag for the next couple of months before re-accelerating once again…

Source: Bloomberg

So 100bps of rate-cuts prompted a re-acceleration in home prices… and now prices are tumbling again as you pause… Well played Fed!!