US monthly home prices increase in March, surveys show
US single-family home prices increased solidly on a monthly basis in March, boosted by a persistent shortage of properties on the market, though the overall trend continued to point to a slowdown in house price inflation.
The S&P CoreLogic Case-Shiller national home price index, covering all nine US census divisions, climbed 0.4 per cent in March after adjusting for seasonal fluctuations. That followed a 0.3 per cent rise in February.
“Two months of increasing prices do not a definitive recovery make, but March’s results suggest that the decline in home prices that began in June 2022 may have come to an end,” Craig Lazzara, managing director at S&P DJI, said in a statement.
“That said, the challenges posed by current mortgage rates and the continuing possibility of economic weakness are likely to remain a headwind for housing prices for at least the next several months.”
The housing market has taken the biggest hit from the Federal Reserve’s fastest monetary policy tightening campaign since the 1980s. The average rate on the popular 30-year fixed mortgage has in recent weeks risen to the upper end of its 6.09-6.73 per cent range this year, according to data from mortgage finance agency Freddie Mac. It peaked at 7.03 per cent in late 2022.
The inventory of existing homes remains 44 per cent below pre-pandemic levels, according to data from the National Association of Realtors, which also this month reported price rises in roughly half of the country, multiple offers and many homes being sold above list price.
The shortage is pushing prices up as buyers take advantage of dips in mortgage rates to wade back into the market.
On a year-on-year basis, national house prices gained by a seasonally unadjusted 0.7 per cent in March after advancing 2.1 per cent in February. Strong gains in annual house price growth in March were reported in Miami, Tampa and Charlotte. Annual house prices increased 7.7 per cent in Miami.
A separate report from the Federal Housing Finance Agency on Tuesday also showed monthly house prices maintained their upward trend in March, rising 0.6 per cent after an increase of 0.7 per cent in February. Prices increased 3.6 per cent in the 12 months through March after an advance of 4.2 per cent in February.
House prices increased 4.3 per cent between the first quarters of 2022 and 2023. They were up 0.5 per cent compared to the fourth quarter. REUTERS
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