The Latest Case-Shiller Report Confirms the Housing Market Is Still Absolutely Crazy Right Now
Key takeaways
- 20-city housing price index showed overall 0.5% gain in March, led by increased prices in the Southeast
- The housing market is suffering from supply issues, which is in part keeping inflation higher
- It’s a mixed bag for investors as the market could reach a stalemate if mortgage rates continue to rise
The U.S. housing market is going through a pretty strange time. While most of the market is suffering from high interest rates and declining values, homes for sale have now gained in value two months in a row. It’s down to a shortage in homes as sellers stay put and higher interest rates push buyers out of the race — but it’s a so-so time for real estate investors. Here are the details.
Inflation is still biting the economy. Use AI to help stay on top with Q.ai’s Inflation Protection Kit. The algorithm sifts through the data so you don’t have to, finding the top-performing securities, precious metals and commodities for the week. It then realigns your investment in the holdings to help you build wealth and stay one step ahead.
Download Q.ai today for access to AI-powered investment strategies.
What did the latest index say?
The Case-Shiller 20-city home-price index found home prices increased by 0.5% in March, marking a tight supply of homes across the US. The Southeast saw the biggest gains with Miami up 7.7% year-on-year, Tampa rising by 4.8% and Charlotte climbing 4.7%.
Western cities painted a different picture, with San Francisco prices falling 11.2% year-on-year while Seattle dropped 12.4%. Meanwhile the national index rose by 0.4% in March compared to the previous month.
It’s the second monthly increase for home prices in the U.S., which have slowly declined since the summer of last year. If sellers continue to hold out we could see further increases in home prices as demand outstrips supply.
What’s the deal for investors?
A chronic shortage in housing and higher interest rates has put the home sales market in an interesting position: would-be sellers either don’t have anywhere to move to or are already on ultra-low interest mortgages and are holding out for interest rates to fall.
It’s led to a shortage in homes coming onto the market to sell and hiked up the prices of existing homes on the market. On the one hand, it’s good for homeowners who are looking to avoid their homes dropping in value. But on the other side of things, it’s not great for helping inflation go down.
As for investors, it’s a mixed picture. While rising house prices are a good thing for those already in the game, if you’re looking to buy now you face the risk of house prices falling again thanks to mortgage rates staying high and putting off buyers. Timing the market is never easy and doesn’t always pay off, so a diversified REIT might be a better option for your investing strategy.
The bottom line
The latest housing report is another concerning confirmation that housing is still contributing to inflation, while the market itself is defying the odds and homes are holding, or even gaining in value in some parts of the country. What will happen next is anyone’s guess, but it’s not going to be over any time soon.
Another part of the market that’s flying is the tech industry. Q.ai’s Emerging Tech Kit can help you to invest in the volatile market using AI. The algorithm hunts down the top-performing tech stocks and ETFs, then dynamically shifts around the Kit’s holdings to help you build wealth.
Download Q.ai today for access to AI-powered investment strategies.
