According to S&P CoreLogic’s Case-Shiller US National Home Price Index, prices rose 19.8% year over year in February, an even faster rate than January’s 19.2% growth.
Phoenix, Tampa and Miami posted the highest annual gains among the 20 US cities covered by the index. Phoenix led for the 33rd straight month, with home prices up 32.9% year over year. Tampa and Miami followed with gains of 32.6% and 29.7%, respectively.
All 20 cities reported price increases in the year to February 2022. In January, 16 cities recorded year-on-year growth. Prices were strongest in the South and Southeast, but all regions continued to post big gains.
“US home prices continued to rise very rapidly in February,” said Craig J. Lazzara, managing director at S&P Dow Jones Indices. “This price growth indicates broad-based strength in the housing market, and that’s what we continue to see.”
Although Lazarra noted that rising inflation, more interest rate hikes by the Federal Reserve and rising mortgage rates could soon decelerate the housing market.
The imbalance between strong demand from potential buyers and an insufficient supply of available homes has also pushed home prices higher, said George Ratiu, manager of economic research at Realtor.com
“Today’s S&P Case-Shiller index highlights a housing market that experienced a renewed sense of urgency in February, as buyers worked through a small number of homes for sale to stay ahead of rising mortgage rates,” he said he.
While inventories have increased somewhat since February, there have also been some other changes since then, according to the National Association of Realtors. The real estate markets saw supply chain disruptions due to the war in Ukraine. Mortgage rates have also risen rapidly, topping 5% for the first time since 2010. In addition, a strong labor market is driving up wages and inflation, he said.
“For buyers, the jumps in prices and mortgage rates resulted in sticker shock,” Ratiu said.
For an average-priced home financed with a 30-year loan, the monthly payment is $550 more than it was a year ago, he said.
However, with more inventory expected to hit the market this spring and mortgage rates rising, housing analysts are expecting demand to cool.
“Many buyers are choosing to step back and reassess their budgets and timelines,” Ratiu said.