US Home Prices Reached New Record High In March, Despite Soaring Rates

Home prices in America’s 20 largest cities rose for the 13th straight month in March (according to the latest data from S&P CoreLogic – Case Shiller – data today), up 0.33% (more than the expected 0.3%) with the 0.61% MoM gain In Febriary revised down to +0.55% MoM.

Source: Bloomberg

This pushed the price up 7.38% YoY – the fastest rise since October 2022…

“We’ve witnessed records repeatedly break in both stock and housing markets over the past year. Our National Index has reached new highs in six of the last 12 months.” says Brian D. Luke, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices.

Overall, US home prices reached a new record high in March (as median new home prices began to fall)…

Source: Bloomberg

San Diego continued to report the highest year-over-year gain among the 20 cities this month with an 11.1% increase in March, followed by New York and Cleveland, with increases of 9.2% and 8.8%, respectively.

Portland, which still holds the lowest rank after reporting three consecutive months of the smallest year-over-year growth, posted the same 2.2% annual increase in March as the previous month.

Luke suggested this implies “a strong demand for urban markets.”

No city has seen a MoM decline in price in 2024.

Home prices continue to track Fed Reserves closely, but a turning point may come soon…

Source: Bloomberg

Given the smoothing and heavy lag in the Case-Shiller data, it’s hard to find a causal relationship between prices and mortgage rates…

Source: Bloomberg

…but with rates remaining above 7%, it seems hard to believe prices can continue their advance.