Home values continued to decline in real terms for the 11th consecutive month, according to the latest Case-Shiller index. Nominal prices rose just 0.8% in April, but persistently high inflation meant that inflation-adjusted values actually fell, marking an extended stretch of real-terms erosion that has not been seen in decades.
The national data masks sharp regional disparities. While some Sun Belt markets like Phoenix and Tampa have seen nominal price declines, others in the Northeast are still posting small gains, though all metros are feeling the drag of inflation. The Case-Shiller index, which tracks prices in 20 major cities, showed the weakest annual growth since the pandemic-era housing boom.
Mortgage rates remain elevated above 6.5%, squeezing affordability for buyers who are already struggling with higher prices on everything from groceries to construction materials. The real-terms decline in home values means that while nominal prices have not crashed, households are losing purchasing power even if their home's sticker price holds steady.
For sellers, the market is shifting. Days on market are increasing, and more sellers are offering concessions to close deals, a sharp reversal from the bidding-war environment of 2021 and 2022. Buyers, meanwhile, face a paradox: lower real prices but still-high monthly payments due to elevated rates, leaving many on the sidelines.
Some economists caution that the nominal price stability could be fragile if the labor market weakens further, but others argue that low inventory will continue to support prices. The 0.8% nominal gain, though modest, still reflects upward pressure from a supply-constrained market, meaning a full-blown crash remains unlikely despite the months-long real-terms slump.