According to the S & P Core Logic Case-Shiller US Home Price Index, home prices in March rose 20.6% year-on-year, even higher than the 20% rise seen in February. This was the highest year-over-year price volatility in data over 35 years.
The city of Sunbelt once again saw the largest price increase among the 20 US cities tracked by the index. But for the first time in almost three years, Phoenix wasn’t the city with the fastest rise in home prices.
Prices in Tampa, Florida rose the most, up 34.8% year-on-year. Phoenix was up 32.4% from a year ago and Miami was up 32%. Seventeen of the 20 cities reported higher price increases in the year ending March 2022 compared to the year ending February 2022.
Prices were highest in the South and Southeast, but continued to rise significantly in all regions.
Craig J. Lazara, Managing Director of the S & P Dow Jones Index, said the expected slowdown in the housing market in March was due to rising mortgage rates and the Federal Reserve’s surge in rates. Said did not arrive.
“The macroeconomic environment may not support the extraordinary rise in house prices for much longer,” Lazara said. “It is safe to predict that price increases will begin to slow, but the timing of the slowdown is a more difficult call.”
Daniel Hale, chief economist at Realtor.com, said another surge in home prices in March felt pressure on buyers to bid competitively on several homes for sale. ..
“Mortgage shoppers were motivated to fix mortgage rates before rising prices, rising interest rates, or a combination of the two could bring a knockout punch to their aspirations,” Hale said. Said.
Recent housing data suggests that the market has shifted since March.
“Compared to this time last year, more sellers have observed a real estate renewal that lists homes and increases the availability of available homes,” says Hale. “In the meantime, mortgage rates have been stable, but have remained close to their highest levels in 13 years.”
But importantly, she said, Recently Sales data for both new and existing homes show that buyers are becoming increasingly impossible or unwilling to buy a home under these conditions.
“As buyer confidence declines and demand is squeezed, the real estate market will rebalance and eventually move away from the significant benefits that modern home retailers have enjoyed,” Hale said. “This initially means a decline in home sales, which should reduce the bid wars and concessions that buyers make to sweeten their offers.”