Real Estate

Home prices surged in March as interest rates also rose: S&P Case-Shiller

A offered signal sits outdoors a house. 

Adam Jeffery | CNBC

Rising mortgage rates didn’t decelerate rising residence prices in March.

Nationally, residence prices have been 20.6% increased than they have been in March 2021, based on the S&P CoreLogic Case-Shiller Home Price Index. That is increased than the 20% acquire in February. The index is a three-month working common ending in March.

The common rate on the 30-year fastened mortgage stood at 3.29% in the beginning of January and ended March at 4.67%, based on Mortgage News Daily.

The Case-Shiller 10-city composite rose 19.5% yearly in March, up from 18.7% in February. The 20-city composite noticed a 21.2% year-over-year acquire, up from 20.3% in the earlier month. For each nationwide and 20-city composites, March’s studying was the very best year-over-year value change in greater than 35 years of information.

Regionally, Phoenix slipped from the highest gainer spot for the primary time in three years, with Tampa, Florida, taking on. Tampa, Phoenix and Miami continued to see the very best annual positive aspects, with will increase of 34.8%, 32.4% and 32.0% respectively. Seventeen of the 20 cities reported increased value will increase in the year ended in March 2022 versus the year ended in February 2022.

“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,” mentioned Craig Lazzara, managing director at S&P DJI. “All 20 cities saw double-digit price increases for the 12 months ended in March, and price growth in 17 cities accelerated relative to February’s report.”

Cities seeing the smallest value positive aspects, albeit nonetheless in double digits from a year in the past, have been Minneapolis (+12.4%), Washington (+12.9%) and Chicago (+13%).

The expectation is that prices will start to ease, since residence gross sales have been falling now for a number of months. Demand, nonetheless, remains to be excessive, and actual property brokers report that they’re nonetheless seeing a number of presents for properties which are priced accurately. More provide is also approaching the market, as sellers fear they’ll miss out on the final days of the recent market.

“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. Although one can safely predict that price gains will begin to decelerate, the timing of the deceleration is a more difficult call,” added Lazzara.

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