U.S. home prices increased in February as mortgage rates dipped and home buyers seized what little inventory was available.
According to Black Knight’s Mortgage Monitor report, home prices increased 0.16% on a seasonally adjusted basis in February compared with January – marking the first positive month-over-month gain nationally in eight months.
It was the strongest single-month gain since May 2022. Home prices increased in 78% of the 50 largest U.S. markets.
Inventory levels continued to deteriorate, with the seasonally adjusted number of homes available for sale falling for the fifth consecutive month to their lowest level since May of last year.
“February’s national increase in home prices – up 0.16 percent, adjusted for seasonality – marked the first positive monthly growth we’ve seen in eight months,” says Andy Walden, vice president of enterprise research for Black Knight, in a statement. “Daily transaction info from Black Knight Collateral Analytics and our Optimal Blue rate lock data show that the purchase market increased when rates declined in the early part of the month and borrowers were quick to take advantage of limited inventory.
“In many areas of the country, that dynamic – low inventory and a modest rise in demand – led to an uptick in home prices,” Walden says. “All in, 39 of the 50 largest U.S. markets saw prices increase in February – in sharp contrast to just three months earlier, when 48 of those 50 were experiencing price declines.
“While some price increases – most notably in Miami, which saw the largest of the month – can be chalked up to people moving to the area, we’re seeing stronger price gains more generally in those areas with better affordability and larger inventory deficits,” Walden adds. “Still, the backward-looking national annual home price growth rate continued its descent, falling to 1.94 percent – the first time we’ve seen it under 2 percent since 2012. While that national number is still on track to fall below 0 percent in April, if inventory challenges and easing interest rates persist, they may well push it back into positive territory later this year.”