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Home prices continue to reach new highs 

The latest Case-Shiller index reported another record high, with U.S. home prices increasing 6.5% year-over-year in March.

May 28, 2024
3 minutes

U.S. home price growth hit another record high in March according to the latest S&P CoreLogic Case-Shiller data, with prices increasing 6.49% over the last year and up slightly from February. 

What S&P analysts said: "On a seasonal adjusted basis, national home prices have reached their ninth all-time high within the past year, with all 20 metropolitan markets posting positive annual gains for the fourth consecutive month, indicating widespread and sustained growth in the housing sector," said Brian D. Luke, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices.

"We've witnessed records repeatedly break in both stock and housing markets over the past year," he added.

Continuing growth has pushed national home prices to new highs. NAR reported that April's median existing-home sale price of $407,600 was the highest ever recorded for the month of April, while the median sale price of new homes was $433,500 last month — down from the record high of $460,300 in October 2022, but up roughly $100,000 from pre-pandemic levels.

Which regions are performing the best? Both the 10-city and 20-city indexes have seen big gains in the last year, increasing 8.2% and 7.4% respectively in March. And it's the large population centers that are seeing home prices grow the fastest as the pandemic boomtowns take a back seat. "COVID was a boom for Sunbelt markets, but the bigger gains the last couple of years have been the northern metro cities," Luke said.

Regionally, the Northeast saw the highest annual gain with 8.3% growth, while momentum has slowed in some areas that previously experienced a rapid pace of growth, including Tampa, Phoenix and Dallas. 

Cities with the biggest gains were San Diego (up 11.1%), New York (9.2%), Cleveland (8.8%) and Los Angeles (8.8%). Chicago and Boston were close behind, with both cities posting 8.7% gains.

Monthly growth was more modest at 1.6% overall for the city indexes. Among the metros analyzed, Seattle and San Francisco saw the biggest increases between February and March.

Where prices and inventory are headed: Some housing market economists expect price growth to slow in the coming months, which, combined with improving supply, could offer some relief to buyers. 

"Home inventory increased 23.5% in March, but remained nearly 40% lower than pre-pandemic levels," said Sr. Economist Ralph Mclaughlin. "Existing home sales decreased 4.3% in March following February's large gain. Given the surge in mortgage rates between the end of March and the beginning of May, we expect both home price growth, inventory, and home sales to moderate in future housing market data releases."

High housing costs have become such a big issue that they could play a role in the upcoming 2024 presidential election, Bright MLS Chief Economist Dr. Lisa Sturtevant noted in her analysis of the latest numbers, adding that inventory could remain an issue for some time. 

"Home price growth will likely slow down this summer as mortgage rates remain high, sidelining some prospective homebuyers, while at the same time inventory will be increasing," she said. 

"However, the fundamental gap between demand and supply will remain. Even if Federal policies to increase supply are put into place, the effect will not be immediate. The result is that we are likely to be in a low supply environment through the Presidential election and probably into the next decade."

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