S&P Case Shiller's adjusted 20-city house price index rose a very solid and slightly higher-than-expected 1.0% in March with gains across all cities and well balanced gains across all regions.

These gains, however, were not confirmed by the Federal Housing Finance Agency house price index, which rose a lower-than-expected 0.3% in March. The most optimistic reading for March came from Black Knight Financial Services (BKFS), a Fidelity National Financial (FNF) company.

Black Knight’s index says that home prices were up 1.2% in the month of March and up 4.8% on a year-over-year basis. Those totals represent the largest monthly gain in national home prices since June 2013.

“As we move deeper into the traditional home buying season, the low level of homes for sale in many markets is continuing to push prices higher,” said Quicken Loans Vice President Bill Banfield. “Once more owners realize the opportunity to sell their home, price gains will slow and prices may even dip in response to the greater choice for buyers.” 

Year-on-year readings in both the S&P and FHFA reports show an improving trend, at a moderate 5% for Case-Shiller and plus 5.2% for FHFA. 

“Home prices have enjoyed year-over-year gains for 35 consecutive months,” says David Blitzer, Managing Director & Chairman of the Index Committee for S&P Dow Jones Indices. “The pattern of consistent gains is national and seen across all 20 cities covered by the S&P/Case-Shiller Home Price Indices. The longest run of gains is in Detroit at 45 months, the shortest is New York with 27 months. However, the pace has moderated in the last year; from August 2013 to February 2014, the national index gained more than 10% year-over-year, compared to 4.1% in this release.

“Given the long stretch of strong reports, it is no surprise that people are asking if we’re in a new home price bubble. The only way you can be sure of a bubble is looking back after it’s over. The average 12 month rise in inflation adjusted home prices since 1975 is about 1.0% per year compared to the current 4.1% pace, arguing for a bubble. However, the annual rate of increase halved in the last year, as shown in the first chart. Home prices are currently rising more quickly than either per capita personal income (3.1%) or wages (2.2%), narrowing the pool of future home-buyers,” Blitzer said. “All of this suggests that some future moderation in home prices gains is likely. Moreover, consumer debt levels seem to be manageable. I would describe this as a rebound in home prices, not bubble and not a reason to be fearful.” 

Turning to Case-Shiller, the strongest gain in March came from Detroit where prices rose 2.6% following 1.2% and 1.0% gains in the two prior months. Gains in this hard-hit city speak to general strength for house prices.

Prices have also been rising in Minneapolis, up 1.8% following February's 1.7% gain. West Coast cities, as usual, are at the top of the price list with Florida also showing strength.

Unadjusted data are closely watched in the Case-Shiller report and tell the same story with a 0.9% 20-city gain in March. Both adjusted and unadjusted data show plus 5.0% year-on-year rates for both March and February in what is a rising trend from prior months.