Home price growth continued in February. Annual home price gains rose 19.8% in February, up from a 19.1% year-on-year increase in January, according to the latest data S&P CoreLogic Case-Shiller National Home Price Index Report released on Tuesday.
Month-over-month, the US National Index saw home prices increase by 1.7%. In December, after four consecutive months of declines, the index began to rise again.
“US home prices continued to rise very rapidly in February,” S&P DJI chief executive Craig Lazzara said in a statement. “The National Composite’s 19.8% annual change in February was the third-highest in its 35-year history. This level of price growth indicates broad-based strength in the housing market, and that is what we continue to monitor.”
Case-Shiller’s 20-city home price index rose 20.2% year-on-year from 18.9% the previous month. All 20 cities analyzed reported higher price increases in the year ended February 2022 compared to the year ended January 2022, as well as month-over-month price increases.
The 10-city home price index also rose in February, from 17.3% yoy growth in January to 18.6% in February.
“All 20 cities saw double-digit price increases in the 12 months to February, and price growth in all 20 cities accelerated compared to the January report,” Lazzara said in a statement. The February price increase ranked in the top quartile of historical experience for each city and in the top decile for 18 of them.”
Once again, Phoenix, Tampa, and Miami reported the highest annual home price increases among the 20 cities analyzed, with annual increases of 32.9%, 32.6%, and 29.7%, respectively.
Experts attribute February’s rapid house price hikes to low inventories and high demand from buyers hoping to get into a home before mortgage rates rise. Mortgage rates have now passed the 5% mark, the highest level in the last 10 years.
“This tremendous demand has come from first-time homebuyers, particularly those looking to buy and complete their mortgages before interest rates continue to rise,” said Steve Reich, COO of Finance of America Mortgage, said in a statement. “At the same time, housing supply is still at record lows – and these two factors continue to drive prices higher. While reports of additional inventory and further potential Fed rate hikes could weigh on house prices over the long term, I believe fear of missing out on low rates is contributing to our rise in house prices seen in January and February.”