With expectations high heading into spring, it’s been a decidedly underwhelming season. May marks the fifth consecutive month national yearly home price growth has softened. By year’s end, home prices are expected to normalize in the sub 5% annual growth range according to Clear Capital’s latest forecast in July’s HDI Market Report.

Despite a lethargic spring buying season, the range of home price growth across the 50 major metro markets may surprise you — 22.3 percentage points over the last year (see Graph 1: MSA vs. ZIP Code Performance). A deeper dive into metro markets’ ZIP code price change over the last year reveals a range, from -37% to +45%.

When stacked up against other major metro markets, Cleveland has the largest variation in ZIP code performance. The top performing Cleveland ZIP saw 42.3% annual growth, while its lowest performer saw -23.3%. Sure, you can get lucky with a broad market approach in markets like Rochester, NY, where the spread is narrow — just 4.4 percentage points. But this is the exception; given 44 major metro markets saw a spread greater than 15 percentage points over the last year. Even in stronger performing markets, like California and Florida there is wide variation at the ZIP code level.

“It’s no surprise that the spring buying season isn’t moving the needle this year,” said Dr. Alex Villacorta, vice president of research and analytics at Clear Capital. “The rising price floor in the low tier sector of the market has squeezed investor returns, thereby removing a key demand segment. We don’t expect to see a large pop in prices through the summer buying season. It’s likely we’ll keep chugging along at our current pace, somewhere around 1% quarterly gains for the rest of the year.

Considering the number of key housing fundamentals that remain stressed, like millions of borrowers still underwater, high levels of student debt, potential borrowers with less than perfect credit, and a job market that is still recovering, we don’t expect a market with waning investor demand to withstand any eye-popping rates of growth. Although it’s not a quick fix to the larger housing problem, home price moderation is really a healthy move for the market overall. While some might be discouraged by a weak spring buying season, we are encouraged that price trends are finally calibrating back to pre-bubble norms. Despite other headwinds, moderating home prices will serve as the foundation to a more balanced market moving forward, Villacorta said.

The Clear Capital HDI Market Report provides insights into market trends and other leading indices for the real estate market at the national and local levels