House price growth rose to its highest level in more than 15 years in March as strong demand continued to outpace housing supply.
The S & P Core Logic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the country, rose 13.2% in the year ended in March from an annual rate of 12% last month. March recorded the highest annual price increase since December 2005.
Prices have risen sharply in recent months due to strong demand for home purchases from ultra-low interest rate mortgages and a shortage of homes for sale. According to the National Association of Real Estate Agents, there were 1.07 million homes on the market at the end of March, down 28.2% year-on-year.
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Although there are early signs that home sales are slowing, economists expect supply-demand imbalances to continue to push prices up. Soaring home prices and inventory restrictions prevent first-time buyers and those with limited budgets from taking ownership of the home.
New home sales fell 5.9% from March to April to a seasonally adjusted annual rate of 863,000, according to the Department of Commerce.
The Case-Shiller 10 Cities Index increased 12.8% over the year ended in March, compared to a 11.7% increase in February. The 20-city index rose 13.3% after rising 12% annually in February. Price increases accelerated in all 20 cities.
Selma Hepp, Deputy Chief Economist at CoreLogic, said:
Economists surveyed by The Wall Street Journal predicted that the index for 20 cities would increase by 12.4%.
Phoenix showed the fastest rise in home prices in the country for 22 consecutive months, at 20%, followed by San Diego at 19.1%.
Another measure of home price increases by the Federal Housing Finance Agency, released Tuesday, found that March home prices rose 13.9% year-on-year. This is a record of data dating back to 1991.
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U.S. home price growth accelerates in March
Source link U.S. home price growth accelerates in March