A sold sign sits outside a house.
Adam Jeffery | CNBC
The rise in mortgage rates did not slow the rise in house prices in March.
Nationally, home prices were 20.6% higher than they were in March 2021, according to the S&P CoreLogic Case-Shiller Home Price Index. That’s more than the 20% gain in February. The index is a three-month moving average ending in March.
The average 30-year fixed mortgage rate stood at 3.29% at the start of January and ended in March at 4.67%, according to Mortgage News Daily.
The Case-Shiller composite of 10 cities rose 19.5% annually in March, compared to 18.7% in February. The 20-city composite posted a 21.2% year-over-year gain, compared to 20.3% the previous month. For the national and 20-city composites, the March reading was the largest year-over-year price change in more than 35 years of data.
Regionally, Phoenix slipped from the top spot of winners for the first time in three years, with Tampa, Fla., taking over. Tampa, Phoenix and Miami continued to post the highest annual gains, with increases of 34.8%, 32.4% and 32.0% respectively. Seventeen of the 20 cities reported higher price increases in the year ended March 2022 compared to the year ended February 2022.
“Those of us who were anticipating a deceleration in the rate of growth of US home prices will have to wait at least another month,” said Craig Lazzara, chief executive of S&P DJI. “All 20 cities recorded double-digit price increases for the 12 months ended March, and price growth in 17 cities accelerated from the February report.”
The cities with the smallest price increases, although still double digits from a year ago, were Minneapolis (+12.4%), Washington (+12.9%) and Chicago (+13%) ).
Prices are expected to begin to ease, as home sales have now been falling for several months. Demand, however, is still high, and real estate agents report that they still see multiple offers for homes that are priced right. Increased supply is also coming to market as sellers fear they will miss out on the final days of the hot market.
“Mortgages are becoming more expensive as the Federal Reserve has begun raising interest rates, suggesting that the macroeconomic environment may not support extraordinary house price growth for long. predict with certainty that price gains will begin to slow, the timing of the deceleration is a more difficult decision,” Lazzara added.