The number: The cost of buying a home rose by a record amount, according to two major barometers of U.S. house prices. The house price index in 20 major cities increased at an annual rate of 11 Up 9% in February, according to the S&P CoreLogic Case-Shiller Home Price Index. On a monthly basis, house prices were up 1.2%.
The separate national index, which measures home prices across the country, showed a similar 12% gain over the past year. What happened: Prices went up in the 20 cities Case-Shiller analyzed. Among these cities, Phoenix saw the largest increase once again with a jump of 17.4%, followed by San Diego (up 17%) and Seattle (up 15.4%). Separately, the Federal Housing Finance Agency released its own monthly house price index, which showed that home prices rose 0.9% monthly and 12.2% over the past year through February. This was a new record for the index, said Lynn Fisher, deputy director of the FHFA’s research and statistics division. That increase equates to a gain of $ 35,000 for the median-priced home, according to data compiled by Fannie Mae FNMA, + 0.62% and Freddie Mac FMCC, -0.41%, Fisher said. At the regional level, as with the Case-Shiller index, the FHFA measure showed that prices were accelerating in all regions of the country. The mountainous region, which incorporates the states crossed by the Rocky Mountains, including Arizona and Idaho, saw the largest gain, with an increase of 15.4%. The Big Picture: The housing market is racing, but is it running out of gas? Home prices are rising at a record pace mainly due to the low supply of homes for sale. Inventory has fallen to a record low in recent months. While there is some evidence that sellers may return to the market, it may not be enough to meet growing demand, particularly among millennials who have reached the home buying phase. But the lack of inventory also represents the biggest obstacle to the housing market. The pace of sales could well fall in the coming months, especially if rising prices start to outpace rock-bottom mortgage rates to make affordability a major headache again. While mortgage rates rose for much of the first quarter of the year, they have since started to decline again in light of continued pandemic-related concerns. Most economists expect them to rise for the rest of 2021, but the question is how much more they could rise. What They Are Saying: “The housing market is on full steam ahead, and many observers are wondering where the train is headed and what the next stop will be like,” said CoreLogic CLGX, Deputy Chief Economist Selma Hepp. “However, while the question of sustainability is reasonable, the strength of the housing market reflects many of the positive and continually improving signs of the economic recovery, including job gains, consumer savings and more power. purchasing power among home buyers, all while mortgage rates remain historically low. “” We’ve seen 200,000 fewer new sellers than we would normally see in January and February and 117,000 additional new sellers were missing compared to the typical March year, “said Realtor.com Chief Economist Danielle Hale.” These trends have resulting in extremely frustrating trends for buyers, especially beginners. However, there may be hope on the horizon as we are currently in the best time of year for sellers to list a home in many markets. ”