ResiClub co-founder and editor-in-chief Lance Lambert talks about the US housing affordability crisis on “Making Money.”
Home prices hit a new record in March. Housing shortageThis is despite rising mortgage rates putting home buying out of reach for more Americans.
The S&P CoreLogic Case-Shiller index showed Tuesday that national home prices rose 6.5% year-over-year in March, the same as the previous month and the fastest rate of growth since November 2022.
On a monthly basis, prices rose 0.3%, according to the index.
“This month’s report was another record high,” Brian Luke, head of commodities, real and digital assets at S&P DJI, said in a statement. “Over the past year, we have witnessed records being broken repeatedly in both the stock market and the housing market.”
Mortgage calculator: See how much rising interest rates will cost you
A home in Rocklin, California, on December 6, 2022. (Photographer: David Paul Morris/Bloomberg via Getty Images/Getty Images)
Composite home prices in 10 cities, including Los Angeles, Miami and New York, rose 8.2% from a year ago, up from an 8.1% increase in February. Composite home prices in 20 cities, which also track home prices in Dallas and Seattle, rose 7.4% from a year ago, also up from a 7.3% increase in the previous month.
Prices rose in all 20 major metropolitan markets tracked by the index.
of Biggest price increase San Diego again recorded an 11.1% increase over last year, followed by New York and Cleveland with increases of 9.2% and 8.8%, respectively.
Why can’t I find any homes for sale?
Denver had the smallest home price growth in March, with home prices up just 2.1% from a year ago, the same as the previous month.
“Cities like Tampa, Phoenix and Dallas, which were top performers in 2020 and 2021, are now seeing a slower pace of growth,” Luke said. “Sunbelt markets have boomed during the pandemic, but it’s the northern metropolitan areas that have seen the bigger growth over the past few years.”
A sign outside a home for sale on Sept. 6, 2023, in Atlanta, Georgia. (Photographer: Elijah Nouvérage/Bloomberg via Getty Images/Getty Images)
The Case-Shiller Index is released with a two-month lag, so it may not reflect the latest market trends.
There are several factors behind the rise in home prices: Years of a housing shortage led to a housing shortage in the country, which was then followed by a housing price boom that made homes even more expensive. Mortgage interest rates soar and expensive construction materials.
Click here to get FOX Business on the go
Rising mortgage rates over the past three years are also creating a “golden handcuff” effect on the housing market: Sellers who locked in record-low mortgage rates of less than 3% at the start of the pandemic are becoming reluctant to sell, further restricting supply and leaving eager would-be buyers with few options.
Economists predict mortgage rates will remain high into 2024 before starting to fall. Federal Reserve Even if they start cutting rates, they are unlikely to return to the lows seen during the pandemic.
