Prices up even as mortgage rates rise
Home price growth gathered pace across the US in February, with prices jumping by 6.4% compared with the same time last year.
That’s according to S&P’s CoreLogic Case-Shiller index, which showed prices accelerated at a faster clip than January (when growth was 6%) even as mortgage rates continued to climb.
February’s price growth marks its fastest rate of acceleration since November 2022 as all cities included in the index reported increases – with the 10-city composite rising by 8% and the 20-city composite jumping by 7.3%.
Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices, noted that four cities (San Diego, Los Angeles, Washington, DC, and New York) were currently seeing prices hovering at all-time highs.
The Northeast region had emerged as the best performing market for the past six months, Luke said. “As remote work benefitted smaller (and sunnier) markets in the first part of the decade, return to office may be contributing to outperformance in larger metropolitan markets in the Northeast,” he added.
Nationally, San Diego has emerged as the top-performing market after a dip in home prices at the beginning of 2023 – while Los Angeles has also posted home price growth over the past 13 months, Luke said, helping Southern California outperform neighbors in recent times.
Home prices are rising across the country despite climbing borrowing costs as a supply shortage continues to grip the national housing market.
Mortgage rates jumped for the fourth week in a row last week, hitting an average of 7.17% for 30-year fixed loans amid persistent uncertainty about the outlook for the national economy.
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