Home prices surged over 20% in March as interest rates also rose, according to S&P Case-Shiller

Abstract

Rising mortgage rates did not slow down rising home 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. Seventeen of the 20 cities reported higher price increases in the year ending March 2022 versus the year ending February 2022. "Those of us who have been anticipating a deceleration in the growth rate of U.S. home prices will have to wait at least a month longer," says Craig Lazzara, managing director at S&P DJI. "All 20 cities saw double-digit price increases for the 12 months ended in March, and price growth in 17 cities accelerated relative to February's report." Cities seeing the smallest price gains, albeit still in double digits from a year ago, were Minneapolis, Washington and Chicago. The expectation is that prices will begin to ease, since home sales have been falling now for several months. Demand is still high, and real estate agents report that they are still seeing multiple offers for homes that are priced well. "Mortgages are becoming more expensive as the Federal Reserve has begun to ratchet up interest rates, suggesting that the macroeconomic environment may not support extraordinary home price growth for much longer. Although one can safely predict that price gains will begin to decelerate, the timing of the deceleration is a more difficult call," added Lazzara.