Home price growth continued its upward trajectory in March. Annual home price gains were up 20.6% in March, bringing the S&P CoreLogic Case-Shiller National Home Price Index to a reading of 294.5. In February, the index saw a year-over-year increase of 20%.
Month over month, the U.S. National Index saw a 2.6% increase in home prices. In December, the index began to rise again after four consecutive months of declines.
“Those of us who have been anticipating a deceleration in the growth rate of U.S. home prices will have to wait at least a month longer,” Craig J. Lazzara, the managing director at S&P DJI, said in a statement.
The Case-Shiller 20-city home price index posted a 21.2% year-over-year increase, compared to a 20.3% annual increase in February. The increase brought the 20-city index to a reading of 305.63. In total, 17 of the 20 cities analyzed reported higher price increases in the year ending in March 2022 compared to the year ending in February 2022.
The 10-city home price index also rose in March, recording an annual gain of 19.5%, rising to a reading of 317.49. In February, the 10-city index posted a year-over-year increase of 18.7%.
“The strength of the composite indices suggests very broad strength in the housing market, which we continue to observe,” Lazzara said. “All 20 cities saw double-digit price increases for the 12 months end(ing) in March, and price growth in 17 cities accelerated relative to February’s report. March’s price increase ranked in the top quintile of historical experience for every city, and in the top decile for 19 of them.”
Yet again, Tampa, Phoenix and Miami reported the highest annual increases among the 20 cities, but for the first time in nearly three years, Phoenix did not top the list. With a year over year increase of 34.8%, bringing it to a reading of 350.92, Tampa topped the list in March. It was followed by Phoenix with a 32.4% increase and a reading of 323.67, and Miami with an annual increase of 32% and a reading of 371.48.
“As was the case last month, prices were strongest in the South (+29.8%) and Southeast (+29.6%), with every region continuing to show impressive gains,” Lazzara said.
Despite the strong price gains, experts believe it is only a matter of time before the Federal Reserve’s interest rate hikes are reflected in home price gains.
“The market may be nearing an inflection point when it comes to price growth,” Dan Handy, Zillow’s economic data analyst, said in a statement. “Mortgage costs are more than 50% higher than they were a year ago and prospective buyers will likely start to rethink what they can afford. Sellers may already be responding, with the rate of price cuts now on the rise, to meet buyers where they are. Price growth will likely begin to come back toward earth as many buyers are priced out and inventory rises.”