Home prices rose in February at the fastest pace since November 2022, according to national home price data released Tuesday.
Prices nationwide rose by 6.4% compared to the same month last year The S&P CoreLogic Case-Shiller Home Price Index showed.
“After last year’s decline, U.S. home prices are at or near all-time highs,” Brian Locke, head of commodities, real and digital assets at S&P Dow Jones Indices, wrote in a press release.
“Our 10- and 20-city composite indices are currently at all-time highs.”
A gauge measuring price changes in 20 of the country's largest cities rose 7.3%, compared with an increase of 6.6% the previous month. Data from Bloomberg showed that analysts expected this reading to show a rise in prices by 6.7% compared to the previous year.
Prices rose nationally by 0.6% compared to the previous month, which is the first monthly increase since last October. On a seasonally adjusted basis, prices rose 0.4% in February.
“Since the previous price peak in 2022, this is the second time house prices have risen in the face of economic uncertainty,” Locke added.
“The first decline came after the start of the Fed's interest rate hike cycle. The second decline came after the peak in average mortgage interest rates last October. Enthusiasm for potential Fed cuts and lower mortgage interest rates appears to have Buyer behavior supported, pushing investors in 10 and 20 countries to decline City Composites to new highs.”
On a monthly basis, Seattle, San Diego and San Francisco saw the largest jumps in home prices. Over the previous year, San Diego, Detroit, and Chicago saw the largest price increases.
“A significant shortage of existing homes for sale led to a strong 0.4% rise [month-over-month] House prices rise in February, consistent with our call above consensus that house price growth will end 2024 at 5%. [year-over-year]“Thomas Ryan, a real estate economist at Capital Economics, wrote in a note to clients on Tuesday.
“Looking ahead, while higher mortgage rates will prevent a home price boom, we believe the combination of tight supply and high buyer demand will provide a few more years of strong home price growth.”
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