US home-price appreciation accelerates for fourth month
Home-price growth in 20 U.S. cities picked up for the fourth straight month with Tampa, Florida, showing the biggest gains.
A measure of prices in those 20 cities climbed 21.2% through March following a 20.3% gain in February, the S&P CoreLogic Case-Shiller index showed Tuesday. All 20 cities reported double-digit price increases for the year ended March and prices in Tampa jumped 34.8%, according to a statement.
“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 Lazzara, a managing director at S&P Dow Jones Indices, said in the statement.
Homebuyers are facing a worsening affordability situation with mortgage rates hovering around the highest levels in more than a decade. Further price appreciation threatens to add to the pain even as higher rates and economic uncertainty have started to soften the market slightly. Redfin said earlier this month that the number of sellers cutting prices hit the highest level since October 2019.
Nationally, prices rallied 20.6%, “the strongest March annual gain in the history of the data series,” Selma Happ, CoreLogic deputy chief economist, said in a statement. Housing market conditions in the first quarter were some of the most competitive since the start of pandemic.
“Home-buyer frenzy reached another new high as eager buyers pursued last-ditch efforts to secure a home purchase before the mortgage rate surge,” Happ said.
But S&P Dow Jones Indices’ Lazzara warned that a deceleration could be on the horizon.
“Mortgages are becoming more expensive as the Federal Reserve has begun to ratchet up interest rates, suggesting that the macroeconomic environment may not support extraordinary home-price growth for much longer,” Lazzara said. “Although one can safely predict that price gains will begin to decelerate, the timing of the deceleration is a more difficult call.”