The month-over-month recovery in home prices continues in March, following a slight increase in February. Prior to that, house prices posted monthly declines for seven consecutive months.

The S&P CoreLogic Case-Shiller US National Home Price NSA Index was up 0.4% month over month in March after seasonal adjustment, compared to the 0.3% monthly increase recorded in February.

On an annual basis, housing prices continued the trend of growth at a slower rate.

The S&P CoreLogic Case-Shiller US National Home Price NSA Index logged a 0.7% annual gain in March, down from 2.1% in February. Meanwhile, the 10-City Composite and 20-City Composite indexes posted year-over-year declines of 0.8% and 1.1%, respectively, compared to their respective gains of 0.5% and 0.4% in the previous month.

The two consecutive months of price hikes do not make a "definitive recovery" but might be suggesting that the home price drops that started in June 2022 "may have come to an end," said Craig Lazzara, managing director at S&P Dow Jones Indices.

"That said, the challenges posed by current mortgage rates and the continuing possibility of economic weakness are likely to remain a headwind for housing prices for at least the next several months," Lazzara added.

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Price acceleration evident at a granular level

Both the 10-City Composite and 20-City Composite indexes posted a monthly increase of 0.6% and 0.5%, respectively, after seasonal adjustment.

Seasonally adjusted data showed 15 cities with rising prices in March versus 11 in February.

Among the 20 cities in the index, Miami maintained the lead for the eighth consecutive month with an annual increase of 7.7% in March, followed by Tampa, Fla., at 4.8%. On the other end was Seattle, with a 12.4% decline in prices year over year.

Existing home sales decline across US

Existing home sales registered a monthly decline of 3.4% and a yearly decline of 23.2% in April, to a seasonally adjusted annual rate of 4,280,000 units, according to data from the National Association of Realtors.

All four major regions in the country posted a monthly and yearly decline in existing-home sales. The West recorded the biggest declines in existing-home sales on a yearly and monthly basis, at 31.3% and 6.1%, respectively, to an annual rate of 770,000 units in April.

"Home sales are bouncing back and forth but remain above recent cyclical lows," said National Association of Realtors Chief Economist Lawrence Yun in a May 18 research note. Yun explained that the environment of push-pull housing demand was created through a mix of limited inventory, job gains and fluctuating mortgage rates over the past few months.

Also in April new home sales were up 4.1% from March to a seasonally adjusted annual rate of 683,000 units, an increase of 11.8% from the previous year, according to data from the US Census Bureau and the US Department of Housing and Urban Development. The South registered the highest increase in new home sales, up 17.8% from March to a seasonally adjusted annual rate of 443,000 units, a 23.4% climb year over year.

In the Northeast, new home sales fell 58.6% on a month-over-month basis and 46.7% year over year, to a seasonally adjusted rate of 24,000 units in April.

Homebuilder stocks remain positive

The majority of US homebuilder stocks saw a positive one-year total return as of May 26, with the industry median at 35.3%, according to S&P Global Market Intelligence data.

Hovnanian Enterprises Inc. climbed up one position since April, to emerge as the best-performing homebuilder stock, with the company's one-year total return at 96.2%. M/I Homes Inc. followed at the second spot with a one-year total return of 54.7%.

UWM Holdings Corp. toppled Rocket Mortgage LLC in February to become the top US residential mortgage lender, with $7.21 billion in mortgages originated year to date as of February.