U.S. existing single-family prices reached their ninth all-time high within the past year in March, a sign of the strength of the housing market and widespread growth in what buyers are willing to pay.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index climbed 6.5% on an annual basis in March, sending the index to a record-breaking high, according to the latest data released Tuesday. That's faster growth than for February when prices climbed 6.4% annually.
The index also includes 10-city and 20-city composites of major metropolitan markets. In March, both composites reported faster annual growth than the previous month. It’s the second month in a row that the national index and both composites grew on a monthly basis. All cities included in the composites also reported annual price growth, marking the fourth consecutive month of gains.
“This month’s report boasts another all-time high,” Brian D. Luke, head of commodities, real and digital assets at S&P Dow Jones Indices, said in a statement. “We’ve witnessed records repeatedly break in both stock and housing markets over the past year.”
The latest price data comes on the heels of a mixed-bag month of economic and housing data, but it arrives with a significant lag to current prices. Tuesday’s report shows price trends in January, February and March, a period including a higher-than-expected inflation report and lagging housing supply. Since then, though, inflation has eased, mortgage rates have dropped and the supply of existing houses has increased.
A second price index also found that house prices are still rapidly rising. The Federal Housing Finance Agency’s House Price Index showed that between the first quarter of 2023 and the first quarter of 2024, house prices were up 6.6%, according to the latest data released Tuesday. Compared to the fourth quarter of 2023, prices grew 1.1% in the first quarter. On a monthly, seasonally adjusted basis, prices climbed 0.1%.
“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%,” Anju Vajja, deputy director for FHFA’s Division of Research and Statistics, said in a statement.
Urban Demand
The growth in prices has reflected “a strong demand for urban markets,” according to Luke.
In March, house prices in San Diego grew 11.1% compared to the same time the previous year. It's the second month in a row that San Diego has topped the list for price growth. New York, Cleveland, Chicago, Boston, Minneapolis and Los Angeles followed closely behind, with prices growing more than 8% on an annual basis.
On a monthly basis, all 20 cities included in the index saw annual and monthly growth in house prices.
Regionally, the Northeast remains the top performer, “showcasing robust growth” compared to other regions, Luke said. On the other hand, cities that experienced rapid price gains during the pandemic — such as Tampa, Phoenix and Dallas — are now seeing that growth slow.
“COVID was a boom for Sun Belt markets, but the bigger gains the last couple of years have been the northern metro cities,” Luke said.
The FHFA index found a similar trend: While all 50 states saw an annual increase in house prices, four of the five states with the biggest gains were in the Northeast. Of the nine census divisions measured by the index, all regions saw house price growth compared to this time last year, but the West South Central division — including Arkansas, Louisiana, Oklahoma and Texas — reported the smallest increase.