U.S. single-family home prices increased solidly on a monthly basis in March, boosted by a persistent shortage of properties on the market, though the overall trend continued to point to a slowdown in house price inflation.
The S&P CoreLogic Case-Shiller national home price index, covering all nine U.S. census divisions, climbed 0.4% in March after adjusting for seasonal fluctuations. That followed a 0.3% rise in February.
"Two months of increasing prices do not a definitive recovery make, but March's results suggest that the decline in home prices that began in June 2022 may have come to an end," Craig Lazzara, managing director at S&P DJI, said in a statement.
"That said, the challenges posed by current mortgage rates and the continuing possibility of economic weakness are likely to remain a headwind for housing prices for at least the next several months."
The housing market has taken the biggest hit from the Federal Reserve's fastest monetary policy tightening campaign since the 1980s. The average rate on the popular 30-year fixed mortgage has in recent weeks risen to the upper end of its 6.09%-6.73% range this year, according to data from mortgage finance agency Freddie Mac. It peaked at 7.03% in late 2022.
The inventory of existing homes remains 44% below pre-pandemic levels, according to data from the National Association of Realtors, which also this month reported price rises in roughly half of the country, multiple offers and many homes being sold above list price.
The shortage is pushing prices up as buyers take advantage of dips in mortgage rates to wade back into the market.
On a year-on-year basis, national house prices gained by a seasonally unadjusted 0.7% in March after advancing 2.1% in February. Strong gains in annual house price growth in March were reported in Miami, Tampa and Charlotte. Annual house prices increased 7.7% in Miami.
A separate report from the Federal Housing Finance Agency on Tuesday also showed monthly house prices maintained their upward trend in March, rising 0.6% after an increase of 0.7% in February. Prices increased 3.6% in the 12 months through March after an advance of 4.2% in February.
House prices increased 4.3% between the first quarters of 2022 and 2023. They were up 0.5% compared to the fourth quarter.
