Home Prices Continued to Surge in March

U.S. home prices continued to rise in March despite higher mortgage rates.

Home prices nationally were 20.6% higher than they were in March 2021, according to the S&P CoreLogic Case-Shiller Home Price Index. That was higher than the 20% gain in February.

For both national and 20-city composites, March's reading was the highest year-over-year price change in more than 35 years of data.

The index is a three-month running average ending in March.

The average rate on the 30-year fixed mortgage stood at 3.29% at the start of January and ended March at 4.67%, according to Mortgage News Daily.

"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," S&P Dow Jones Indices Managing Director Craig Lazzara told CNBC.

"Although one can safely predict that price gains will begin to decelerate, the timing of the deceleration is a more difficult call."

The Case-Shiller’s 10-city composite rose 19.5% annually in March, up from 18.7% in February.

The 20-city composite saw a 21.2% year-over-year gain, up from 20.3% in the previous month. Fully 17 of the 20 cities reported higher price increases in the year ending March 2022 versus the year ending February 2022.

Phoenix slipped from the top regional gainer spot for the first time in three years, replaced by Tampa.

Tampa, Phoenix, and Miami continued to see the highest annual gains, with increases of 34.8%, 32.4% and 32.0% respectively.

"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," Lazzara told CNBC.

"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 included Minneapolis (+12.4%), Washington, D.C. (+12.9%) and Chicago (+13%).

CNBC reported that prices were expected to begin to ease, since home sales had been falling now for several months. But demand remained high, and real estate agents reported that they still saw multiple offers for homes priced well.

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