Home Prices Show No Signs of Slowing
Home prices, fueled by sharp demand and low inventories, continued to accelerate, according to the S&P CoreLogic Case-Shiller Indices.
The monthly U.S. National Home Price NSA Index reported a 6.5% annual gain in March, unchanged from February. The 10-City Composite annual increase also rose by 6.5%, up from 6.4% in February. The 20-City Composite posted a 6.8% year-over-year gain, no change from February.
Seattle, Las Vegas, and San Francisco continue to report the highest year-over-year gains. Seattle led with a 13.0% year-over-year price increase, followed by Las Vegas at 12.4% and San Francisco at 11.3% increase. Twelve of the 20 cities reported greater price increases in the year ending March from February.
On a monthly basis, the National Index posted an 0.8% gain in March. The 10-City and 20-City Composites reported increases of 0.9% and 1.0%, respectively. After seasonal adjustment, the National Index recorded an 0.4% month-over-month increase in March. The 10-City and 20-City Composites posted 0.4% and 0.5% increases, respectively. All 20 cities reported increases in March before seasonal adjustment, while 19 of 20 cities reported increases after seasonal adjustment.
“Any doubts that real, or inflation-adjusted, home prices are climbing rapidly are eliminated by considering Chicago; the city reported the lowest 12-month gain among all cities in the index of 2.8%, almost a percentage point ahead of the inflation rate,” noted David M. Blitzer, Managing Director and Chairman of the Index Committee with S&P Dow Jones Indices.
“Home prices are rising solidly across much of the country,” said Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C. “The combination of strong population and employment growth in many western tech-centric metro areas combined with the persistence of tight inventories of both new and existing homes continues to push prices higher.”
The report noted as of March, average home prices for the metros within the 10-City and 20-City Composites are back to their winter 2007 levels.
“First-time homebuyers and those on the bottom end of the market will be especially disheartened as overall home price growth translates to withering affordability,” said Cheryl Young, senior economist with Trulia, San Francisco. “Robust demand paired with abysmally low inventory contributed to surging home prices. As if increasing home prices weren’t enough–beleaguered would-be homebuyers faced mortgage rates hitting four-year highs.”
