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Home prices hit another all-time high during March, according to the S&P CoreLogic Case-Schiller Indices.
The National Home Price NSA Index jumped 6.5 percent in March from a year earlier to a record high — the sixth time the index has reached a record high in the past year, fueled by the scarcity of housing inventory.
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On a monthly basis, national home prices increased 1.3 percent between February and March, while composites of the 20 and 10 largest cities in the nation both rose 1.6 percent month over month, according to the S&P, which was updated on Tuesday.
“This month’s report boasts another all-time high,” said Brian Luke, head of commodities, real and digital assets, at S&P Dow Jones Indices. “We’ve witnessed records repeatedly break in both stock and housing markets over the past year.”
The Federal Housing Finance Agency House Price Index, a separate measure of housing prices also updated on Tuesday, found that housing prices were up 6.6 percent between the first quarter of 2023 and the first quarter of 2024, and had increased 1.1 percent between the fourth quarter and 2023 and the first quarter of 2024.
“U.S. house prices continued to grow at a steady pace in the first quarter,” said Dr. Anju Vajja, deputy director for FHFA’s Division of Research and Statistics. “Over the last six consecutive quarters, the low inventory of homes for sale continued to contribute to house price appreciation despite mortgage rates that hovered around 7 percent.”
The consistent growth of home prices caused by the severe lack of housing supply, along with generationally high mortgage interest rates, has painted a grim picture for first-time homebuyers, but some trends are starting to head in the right direction for them.
The average rate for a 30-year fixed-rate mortgage fell below 7 percent last week, after surging throughout April, though economists do not expect rates to drop significantly throughout 2024, meaning they will likely remain elevated.
And while prices continue to rise, some economists predict tempered growth during the summer if inventory continues to increase as it has in recent weeks.
“Home price growth will likely slow down this summer as mortgage rates remain high, sidelining some prospective homebuyers, while at the same time inventory will be increasing,” Bright MLS Chief Economist Lisa Sturtevant said in a statement.
“However, the fundamental gap between demand and supply will remain. Even if Federal policies to increase supply are put into place, the effect will not be immediate. The result is that we are likely to be in a low supply environment through the Presidential election and probably into the next decade.”
