Home prices dipped from February — while annual growth remained suppressed — due to affordability and inventory issues, according to Quicken Loans.
The Home Value Index, which is based on data from home purchases and mortgage refinances, grew 3.37% year-over-year, but dropped 0.2% from February.
“Some of the rampant buyer demand that we’ve seen over the last few years has subsided because of the affordability issues many areas are having, driven by a lack of availability,” Bill Banfield, executive vice president of capital markets at Quicken Loans, said in a press release.
“Would-be buyers have decided to sit on the sidelines to see if more home inventory becomes available at the price points where they’re shopping. The entire housing industry is watching to see what will happen in the coming months — whether owners and builders will provide the home inventory the buyers have been waiting for, amid the recent drop in interest rates,” Banfield continued.
Regionally, the Midwest’s home values increased the most year-over-year, jumping 4.11%. The Northeast followed at 3.65%, with the West next at 2.79% and the South rounding out the quartet with a 2.31% gain. The West had the largest month-over-month increase at 0.79%, while the South had the biggest change, decreasing 1.45% from February.
Appraisal values averaged 0.78% lower than homeowners’ estimates in March, a widening gap over the past five months, according to Quicken’s latest Home Price Perception Index.
“This month’s fluctuation in the HPPI was driven more by a dip in home values than a change in the owners’ viewpoint. Homeowners are often reluctant to believe their house has lowered in value, even at a slight monthly fluctuation,” said Banfield.
“Depending on the area, appraised values are either growing at a much more measured pace, or have taken a step back from their meteoric rise. Homeowners are usually slower to realize change — in either direction — than the appraisers who study the market on a daily basis. This can lead to a slight widening of the perception gap when there is a turn in the market.”