An illustration of homes with a downward arrow constructed of a dollar sign to represent declining home prices.
Illustration by Lanette Behiry/Real Estate News

Price growth continues to slow, especially in the West 

The Case-Shiller and FHFA indices reported dips in annual and monthly home price appreciation, with current levels reflecting more typical rates of growth.

March 28, 2023
3 minutes

Key points:

  • Year-over-year growth precentages remained in the single digits in early 2023, with further cooling expected in the spring.
  • The Southeast continued to post strong home price increases, while some West Coast markets saw price declines.
  • Low inventory and pent-up demand are preventing home prices from falling more dramatically.

Home appreciation continued to cool in the first part of the year according to two reports released on Tuesday, March 28.

The S&P Corelogic Case-Shiller Home Price Index noted home prices in January were up 3.8% nationally year-over-year, while the Federal Housing Finance Agency, which analyzes purchase-only data from Fannie Mae and Freddie Mac, reported a 5.3% annual increase. Both indices found that prices were nearly flat from December. Case-Shiller reported a small decline of less than 1%, while the FHFA reported a similarly small increase.

The Case-Shiller Index found that cities in the Southeast were experiencing the highest home price appreciation. Miami led the way with a 13.8% year-over-year increase, followed by Tampa (up 10.5%), Atlanta (up 8.4%) and Charlotte (up 8.1%). 

On a month-to-month basis, home prices fell slightly for the seventh consecutive time; Miami was the only metro in the 20-city composite that didn't see a price drop from December to January, based on non-seasonally adjusted data.

The West Coast continued to be the hardest hit, with several cities seeing prices decrease year over year. San Francisco saw the biggest drop, with a 7.6% annual decrease, followed by Seattle (down 5.1%). San Diego (down 1.4%) and Portland, Oregon (down 0.5%) also fell into negative territory, while Phoenix was flat.

The FHFA reported a similar geographic trend, with home appreciation strongest in the South Atlantic region and weakest on the West Coast.

The annual price increases seen in recent months reflect more typical levels after more than two years of double-digit jumps. Due to rising interest rates over the past six months, a slowdown was expected. What is perhaps surprising is that home prices haven't cooled further.

That's because even with fewer buyers and sellers, many markets remain very competitive, said Bright MLS Chief Economist Lisa Sturtevant.

Sturtevant said two main factors are keeping prices firm in this market: low inventory and pent-up demand.

"While rising home prices and higher mortgage rates have priced many buyers out of the market, other prospective buyers are still feeling upbeat about their financial situations and have been resolute in their decision to buy a home," Sturtevant said.

Sturtevant expects home price growth to continue at lower levels this spring, particularly if the current market dynamics are unchanged. Demand could start fading as elevated interest rates and higher home prices keep buyers on the sidelines.

"Many sellers will feel the pressure to list their home for a lower price to ensure sufficient buyer attention and a quick sale," said Hannah Jones,'s economic data analyst.

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