San Diego had the fastest rising home prices in the nation for a sixth month, but New York is nipping at its heels.
The San Diego metropolitan area’s annual home price increased 10.3 percent annually in April, according to the S&P Case-Shiller Indices report released Tuesday. It was followed by New York at 9.4 percent — the closest another market has gotten to San Diego in months.
April marked the second month in a row that the index hit a record high, with home prices up 6.3 percent nationally. Higher interest rates and a lack of homes for sale did not stop prices from rising.
“Heading into summer, the market is at an all-time high, once again testing its resilience,” wrote Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices.
The pace of home price growth in San Diego, which includes all of San Diego County, appeared to be slowing. It was up around 11 percent annually from January to March, making the 10.3 percent rise a slight reduction — while still the highest in the nation.
Case-Shiller revised its data to say San Diego had the fastest price gains in November, where it had previously been second behind Detroit. The change makes it six months on top of the 20-city index.
The Case-Shiller Indices track repeat sales of identical single-family houses — and are seasonally adjusted — as they turn over through the years. The median resale single-family home price in the San Diego metro was $985,000 in April.
Interest rates were at their highest point during the year in April but have since come down. In the last week of April, the average interest rate for a 30-year, fixed-rate mortgage was 7.17 percent, according to Freddie Mac. It was down to 7.02 percent Monday morning, said Mortgage News Daily.
Zillow senior economist Orphe Divounguy wrote that mortgage rates pushed some potential buyers out of the market, and made others pause their search.
“The rapid and sudden increase in mortgage rates in April pushed housing affordability further out of reach for many potential buyers,” he wrote, “while some who could still afford held back.”
One thing that might make home shopping slightly less stressful in San Diego County is an increase in the number of homes for sale. There were 3,923 homes listed for sale in April, reported the Redfin Data Center, down from a low of 3,080 in mid-January. As of last week, there were around 4,500 homes listed.
It’s not clear yet if the typically busy summer homebuying season will go off as expected. Mark Hamrick, Bankrate’s senior economic analyst, wrote that many potential sellers would rather hang on to lower mortgage rates and not put homes on the market.
“The remarkable rise in mortgage rates is acting as a kind of golden handcuffs,” he wrote, “limiting the desire and some of the ability of people to move out of the homes they currently own. That further pressures housing inventory, adding insult to supply injury.”
The New York metro area, the closest in price gains to San Diego, had the second biggest rise in prices, 0.8 percent, from March to April (behind Cleveland at 1.2 percent) when adjusted for seasonal swings. That compares to a 0.1 percent rise in San Diego County during the same time. The New York metro area is the biggest in the nation and includes New York City, parts of New York state, much of New Jersey and Connecticut, and Long Island.
All metro areas experienced home price gains in April, with the lowest being Portland, Ore., up 1.7 percent in a year. It was followed by Denver, up 2 percent, and Minneapolis, up 2.9 percent.
Housing costs are expected to be a topic in the Thursday debate between President Joe Biden and former President Donald Trump, say some experts. The Biden administration announced $100 million to fund the construction of subsidized housing rentals across the U.S. on Monday. The project, which is not aimed at for sale housing, is expected to last three years.
Annual price growth by metropolitan areaS&P/Case-Shiller Home Price Index, April 2024
San Diego: 10.3 percentNew York: 9.4 percentChicago: 8.7 percentLos Angeles: 8.6 percentCleveland: 8.5 percentLas Vegas: 8.3 percentMiami: 8.2 percentBoston: 7.9 percentSeattle: 7.5 percentCharlotte: 7.3 percentDetroit: 7.2 percentWashington, D.C.: 6.4 percentAtlanta: 5.9 percentPhoenix: 4.8 percentSan Francisco: 4.7 percentTampa: 3.6 percentDallas: 3.4 percentMinneapolis: 2.9 percentDenver: 2.0 percentPortland, Ore.: 1.7 percent
