Although rising interest rates began to temper demand in the booming real estate market, home prices still soared to the highest rate in 35 years in March, industry data shows. released on Tuesday, and experts say it’s still too hard to tell when hot prices will begin to cool.
Home prices across the country soared 20.6% in March on an annual basis, climbing 2.6% from the previous month, when prices jumped 20% year-on-year. other, according to the closely watched S&P CoreLogic Case-Shiller indices.
Prices in the nation’s largest cities inflated even faster, with the Case-Shiller 20-City Index, which measures prices in cities like New York, Los Angeles and San Francisco, climbing 21.2%.
Tampa, Phoenix and Miami posted the highest year-over-year gains among 20 cities in March, with Tampa home prices jumping 34.8% year-over-year to reverse Phoenix prices, which posted a 32.4% increase and led national gains for nearly three years. years.
“Those of us who were anticipating a deceleration in U.S. home prices will have to wait at least another month,” S&P DJI Chief Executive Craig Lazzara said in a statement Tuesday, noting that prices nationally and in 20 of the largest metropolitan areas have risen at the fastest rate in more than 35 years.
“While it can be safely predicted that price gains will begin to slow, the timing of the deceleration is a tougher choice,” says Lazzara. “Mortgages are becoming more expensive as the Federal Reserve has begun to raise interest rates, suggesting that the macroeconomic environment may not support the extraordinary growth in house prices for much longer.”
Historically high savings rates, government stimulus, low supply and interest rates helped spark a home-buying frenzy during the pandemic, but signs of a slowdown have emerged as the Fed begins its most aggressive cycle of interest rate hikes in two decades. New data last week showed pending home sales fell for the sixth straight month in April to the lowest level in nearly a decade, while new home sales last month fell by almost 17% compared to March.
Before the pandemic, house prices were increasing by less than 4% on an annual basis.
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