U.S. home prices continued their upward climb in March, rising 0.3% on an adjusted basis compared with February and rising 5.8% compared with March 2016, according to the S&P CoreLogic Case-Shiller Indices.
The index’s 10-city composite increased 0.9%, on an adjusted basis, compared with February and increased 5.2% compared with March 2016. The index’s 20-city composite also increased 0.9% month over month and increased 5.9% compared with the same time a year earlier.
Without seasonal adjustment, U.S. home prices increased 0.8% in March compared with February and increased 5.7% compared with March 2016. The 10-city composite posted a 0.9% increase, month over month, while the 20-city composite reported a 1.0% increase.
Eighteen of the 20 cities reported increases in March before seasonal adjustment; after seasonal adjustment, 17 cities saw prices rise.
Seattle, Portland and Dallas reported the highest year-over-year gains among the 20 cities. In March, Seattle led the way with a 12.3% year-over-year price increase, followed by Portland with 9.2% and Dallas with an 8.6% increase.
“Home prices continue rising, with the S&P CoreLogic Case-Shiller National Index up 5.8 percent in the year ended March – the fastest pace in almost three years,” says David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices. “While there is some regional variation, prices are rising across the U.S. Half of the 20 cities tracked by the S&P CoreLogic Case-Shiller indices rose more than six percent from March 2016 to March 2017. The smallest gain of 4.1 percent, in New York, was roughly double the rate of inflation.
“Sales of both new and existing homes, housing starts, and the National Association of Home Builders’ sentiment index are all trending higher,” Blitzer adds. “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. If mortgage rates, currently near four percent, 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.”