Home prices jumped in March to their highest level in 33 months, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine U.S. census divisions.
The index, put out by CoreLogic and S&P Dow Jones Indices, increased 5.8% annually in March. This is an increase from the previous month’s annual gain of 5.7%. The 10-City Composite and the 20-City Composite indices both increased annually by 5.2% and 5.9% respectively.
“Home prices continue rising with the S&P CoreLogic Case-Shiller National Index up 5.8% in the year ended March, the fastest pace in almost three years,” says David Blitzer, S&P Dow Jones Indices managing director and chairman of the index committee. “While there is some regional variation, prices are rising across the U.S.”
Seattle, Portland and Dallas reported the highest annual increases out of the 20 cities. In March, Seattle home prices increased 12.3% annually, Portland increased 9.2% and Dallas increased 8.6%.
“Half of the 20 cities tracked by the S&P CoreLogic Case-Shiller indices rose more than 6% from March 2016 to March 2017,” Blitzer said. “The smallest gain of 4.1%, in New York, was roughly double the rate of inflation.”
Before seasonal adjustment, the National Index increased 0.8% from February to March. The 10-City Composite increased 0.9% and the 20-City Composite increased 1% month-over-month. After seasonal adjustment, home prices increased 0.3% in March, and both the 10-City Composite and the 20-City Composite increased 0.9% monthly.
Eighteen of the top 20 cities reported home price increases in March before seasonal adjustment, and 17 cities still showed an increase after seasonal adjustment.
“Sales of both new and existing homes, housing starts and the National Association of Home Builders’ sentiment index are all trending higher,” Blitzer said. “Over the last year, analysts suggested that one factor pushing prices higher was the unusually low inventory of homes for sale.”
“People are staying in their homes longer rather than selling and trading up,” he said. “If mortgage rates, currently near 4%, rise further, this could deter more people from selling and keep pressure on inventories and prices. While prices cannot rise indefinitely, there is no way to tell when rising prices and mortgage rates will force a slowdown in housing.”