U.S. home prices in March were on the rise, as buyers strived to buy homes before the mortgage rate hit 5%. Home prices skyrocketed 20.6% during the month of March, compared to the previous year, according to the S&P CoreLogic Case-Shiller US National Home Price Index. This marks the highest year over year change in over 35 years.
According to Mortgage News Daily, the average 30-year fixed interest rate was at 3.29% in January and ended at 4.67% by March. Moreover, the Case-Shiller 10-city composite rose 19.5% annually in March, up from 18.7% in February. Meanwhile, the 20-city composite rose 21.2% year-over-year, an increase from the previous month’s 20.3%.
“The strength of the Composite indices suggests very broad strength in the housing market, which we continue to observe,” S&P DJI managing director Craig Lazarra said. “All 20 cities saw double-digit price increases for the 12 months ended in March, and price growth in 17 cities accelerated relative to February’s report. March’s price increase ranked in the top quintile of historical experience for every city, and in the top decile for 19 of them.”
Furthermore, inflation has impacted all industries a great deal. In April, the consumer price index, for everyday goods like gasoline, food and rents, were up 8.3% from the previous year.
“Mortgages are becoming more expensive as the Federal Reserve has begun to ratchet up interest rates, suggesting that the macroeconomic environment may not support extraordinary home price growth for much longer,” Lazarra added. “Although one can safely predict that price gains will begin to decelerate, the timing of the deceleration is a more difficult call.”