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The S&P CoreLogic Case-Shiller Home Price Index (spglobal.com<\/a>) reported in a June 28 press release that average April 2022 home prices increased 20.4 percent from April 2021. Tampa, Miami, and Phoenix led metro areas with 35.8 percent, 33.3 percent and 31.3 percent gains respectively. <\/p>\n\n\n\n We won\u2019t really know if rising interest rates have any\neffect on home prices for several months. \nHome pricing and sales data is reported in hindsight (data is reported three\nto four months behind). The Case-Shiller\nrelease points out that mortgage rates just began to increase when these stats\nwere being compiled (April). However,\nthe recent S&P CoreLogic Case-Shiller Home Price Index is already showing\nhome price moderation (even before rising mortgage rates). The Year-to Date S&P CoreLogic\nCase-Shiller Home Price Index for the US only shows an increase of 7.95\npercent, while the 3-month index increased 6.66 percent and 1-month only\nincreased 2.08 percent<\/strong>. <\/p>\n\n\n\n Rising mortgage interest rates is only part of the economic story that is developing. It was likely that home prices were already moderating as a reaction to the year and a half of sharp increases. As I wrote last week<\/a>, we are in the beginning of the shifting housing cycle. Mixing in other economic factors, such as mortgage rates etc., can either make the housing market more sever or temperate. And as I mentioned, we won\u2019t know for sure until it has happened.<\/p>\n\n\n\n Bottom line<\/p>\n\n\n\n If you\u2019re currently in the market to buy and\/or sell a home, focus on the short-term local trends. Speculation of future national home prices and home sales may be interesting, however is meaningless in the here and now. You should hire a seasoned professional to help understand your neighborhood\u2019s trend, as well as being informed about your potential competition and the local housing market inventory. <\/p>\n\n\n\n If you\u2019re buying a home, work with a seasoned real estate agent\nwho can provide valid comps and analysis before you make an offer. Also, consider having a thorough home\ninspection. In the last year and half,\nhome buyers felt forced to forgo the inspection to make their offer\ncompetitive. However, in the changing\nmarket, home inspections will return.<\/p>\n\n\n\n If you\u2019re selling a home, be aware that home pricing strategies that were lucrative last year won\u2019t work to your advantage this year. It\u2019s nice to think that your home could sell for a peak price much like other neighborhood homes that sold twelve to twenty-four months ago. However, in a changing market, overpricing your home sale could be counterproductive, driving potential home buyers to competing homes. <\/p>\n\n\n\n By Dan Krell
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