CNBC: Rising Home Prices Are Beginning to Hit a Wall

Home values climbed by 6.9 percent in April compared to the same month the year before, which is a slower rate than both February and March.

Spring is known for being the biggest home selling season of the year. But even though the demand is there doesn’t mean that houses are being sold.

Homes that are too expensive for their regional markets won’t sell. And according to a recent CNBC article, that’s becoming the case in more neighborhoods this year. This could be the first sign that large price gains are starting to shrink. While home values rose by 6.9 percent in April compared with the same month in 2016, according to a new report from CoreLogic, it’s a drop from the 7.1 percent annual gain in March and the 7 percent increase in February.

Even though demand for homes is high in communities across the country, home prices are starting to react to increasingly tight inventory. Especially in high price markets like San Francisco, Manhattan and Miami Beach, slower sales are hitting home prices.

“I think we are beginning to see it in selected markets,” said Frank Nothaft, CoreLogic’s chief economist, in an interview with CNBC. “You just can’t have house prices grow at seven percent year after year, when income growth is two-three percent a year.”

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