Homebuyers waiting for housing prices to move may have to wait even longer. (iStock)
Home prices continued to rise in March, hitting a new high, even as homebuyers held off on home purchases, according to the latest S&P CoreLogic Case-Shiller National Home Price Index. report.
House prices are currently 6.5% higher than last year, in line with the highest recorded increase. Mid-FebruaryThe 10-city composite home price index rose 8.2 percent year-on-year, up from 8.1 percent in the previous month, while the 20-city composite home price index rose 7.4 percent, up from 7.3 percent in the previous month. The index measures home prices in major cities across the country.
Nationwide, home prices rose 0.3% month-on-month, slowing from the previous month’s 0.6% increase. Ten-city combined home prices rose 0.5%, and 20-city combined home prices rose 0.3%, seasonally adjusted. This annual and monthly increase in home prices comes as homebuyers continue to struggle to afford homes due to high mortgage rates and a limited housing supply.
“The disconnect between weak home sales activity and rising home prices suggests that housing affordability is forcing many potential homebuyers out of the market, and those who are able to participate have better credit and larger budgets,” said Thelma Hepp, chief economist at CoreLogic. “As a result, home prices continue to rise in most markets, despite rising mortgage rates and the overall cost of homeownership.”
Homebuyers can find the best mortgage rate by weighing their options. They can visit online marketplaces like Credible to compare rates, choose loan terms and get pre-approved with multiple lenders at once.
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These cities saw the biggest increases in home prices
San Diego maintained its top spot among 20 cities this month with an 11.1% increase over last year, followed by New York and Cleveland, which posted year-over-year growth of 9.2% and 8.8%, respectively.
Despite the record growth, there are signs of a slowdown: Tampa, Phoenix and Dallas, the top cities in pandemic markets for 2020 and 2021, are all growing at a much slower pace as relatively abundant new and existing inventory helps ease pricing pressures in the region.
“Regionally, the Northeast continues to be the top performer with an 8.3% annual gain, demonstrating strong growth relative to other metro markets,” said Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices. “Sunbelt markets have thrived during the COVID-19 pandemic, but it’s northern metros that have seen the bigger gains over the past few years.”
One way to tap into the equity in your home is through a cash-out refinance to pay off debt or fund a home improvement project. To find a personalized interest rate that won’t impact your credit score, visit Credible.
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Housing supply is improving
According to Ralph McLaughlin, senior economist at Realtor.com, housing inventory increased 23.5% in March, while existing home sales fell 4.3% in March following a strong increase in February. Higher-interest mortgage rates in late March and early May will likely dampen home price growth and home sales in upcoming housing market data releases, even as inventory continues to improve.
While inventory is increasing, it’s still about 40% below pre-pandemic levels. The good news for homebuyers is that inventory of affordable homes — those priced between $200,000 and $350,000 — increased 41% in April, McLoughlin said.
“While this is certainly good news for inventory-constrained homebuyers, recent increases in mortgage rates and inventory well below pre-pandemic levels mean another tough time for potential buyers,” McLaughlin said.
If you’re considering buying a home, comparison shopping can help you find the best mortgage rates. To compare options without affecting your credit score, visit Credible.
It’s a top city for first-time homebuyers, and other U.S. housing markets are booming.
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